UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07618
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: September 30, 2005
Date of reporting period: September 30, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Municipal Income Fund II
Annual Report
September 30, 2005
ANNUAL REPORT
Investment Products Offered
- ---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
- ---------------------------
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein at (800) 227-4618. Please read the prospectus carefully
before you invest.
You may obtain performance information current to the most recent month-end by
visiting www.alliancebernstein.com.
This shareholder report must be preceded or accompanied by the Fund's
prospectus for individuals who are not current shareholders of the Fund.
You may obtain a description of the Fund's proxy voting policies and
procedures, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein at (800)
227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330.
AllianceBernstein Investment Research and Management, Inc. is an affiliate of
Alliance Capital Management L.P., the manager of the funds, and is a member of
the NASD.
November 17, 2005
Annual Report
This report provides management's discussion of fund performance for the
portfolios of AllianceBernstein Municipal Income Fund II (the "Portfolios") for
the annual reporting period ended September 30, 2005.
Investment Objectives and Policies
The nine portfolios of this open-end fund, by investing principally in
high-yielding, predominantly medium-quality municipal securities, seek to
provide their shareholders with the highest level of income exempt from Federal
and state personal income tax (or for Florida, the intangible tax) that is
available without assuming undue risk. These securities generally offer current
yields above those of higher-quality municipal obligations.
Investment Results
The tables on pages 5-13 show performance for each Portfolio compared to its
benchmark, the Lehman Brothers (LB) Municipal Index, for the six- and 12-month
periods ended September 30, 2005.
For the 12-month period ended September 30, 2005, all of the AllianceBernstein
Municipal Income Fund II Portfolios' Class A shares outperformed the benchmark,
the LB Municipal Index, which represents the municipal market. For the 12-month
period, the benchmark posted a positive return of 4.05%. A description of each
Portfolio's relative performance versus the benchmark for the 12-month period
ended September 30, 2005 follows.
Arizona Portfolio-The Arizona Portfolio's stronger relative performance was
largely the result of security selection in the pre-refunded, special tax and
hospital sectors.
Florida Portfolio-The Florida Portfolio's stronger relative performance was
largely the result of its relative weight in the industrial revenue bond,
hospital and pre-refunded sectors. Security selection in the special tax,
housing, insured and hospital sectors also contributed to positive relative
performance. Security selection in the industrial revenue bond sector detracted
from the Portfolio's performance.
Massachusetts Portfolio-The Massachusetts Portfolio's stronger relative
performance was largely the result of security selection in the pre-refunded,
insured and special tax sectors. The Portfolio's relative weight in the
hospital and industrial revenue bond sectors also contributed to positive
relative performance.
Michigan Portfolio-The Michigan Portfolio's stronger relative performance was
largely the result of security selection in the special tax, insured and
pre-refunded sectors. The Portfolio's relative weight in the hospital and
pre-refunded sectors also contributed positively to performance.
Minnesota Portfolio-The Minnesota Portfolio's stronger relative performance was
largely the result of its relative weight in the pre-refunded, industrial
revenue bond and general obligation sectors. Security selection in the insured
and hospital sectors also
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 1
contributed to positive relative performance. Security selection in the
industrial revenue bond and housing sectors detracted from the Portfolio's
performance.
New Jersey Portfolio-The New Jersey Portfolio's stronger relative performance
was largely the result of its relative weight in the industrial revenue bond
and pre-refunded sectors. Security selection in the insured, pre-refunded and
special tax sectors also contributed to positive relative performance.
Ohio Portfolio-The Ohio Portfolio's stronger relative performance was largely
the result of its relative weight in the industrial revenue bond and
pre-refunded sectors. The Portfolio benefited from security selection in the
insured and special tax sectors. Security selection in the industrial revenue
bond and housing sectors detracted from the Portfolio's performance.
Pennsylvania Portfolio-The Pennsylvania Portfolio's stronger relative
performance was largely the result of its relative weight in the industrial
revenue bond and pre-refunded sectors. The Portfolio benefited from security
selection in the hospital and insured sectors. Security selection in the
industrial revenue bond and housing sectors detracted from the Portfolio's
performance.
Virginia Portfolio-The Virginia Portfolio's stronger relative performance was
largely the result of its relative weight in the industrial revenue bond and
pre-refunded sectors. The Portfolio benefited from security selection in the
education, housing and special tax sectors. Security selection in the
industrial revenue bond sector detracted from the Portfolio's performance.
Market Review and Investment Strategy
For the 12-month period ended September 30, 2005, yields on municipal bonds
with maturities from one to 15 years rose while those with longer than 15-year
maturities declined. For example, the five-year bond yield rose by 0.58% while
the 20-year bond declined by 0.16%. Municipal yields moved less, but in the
same direction as Treasury bond yields. Rising short-term rates were in line
with the actions of the U.S. Federal Reserve. Over the 12-month reporting
period, the Federal Reserve Open Market Committee voted to increase the Fed
Funds rate by 0.25% on eight separate occasions. As of September 30, 2005, the
Fed Funds rate stood at 3.75%. In contrast, the decline in yields for
longer-term bonds was largely the result of strong demand for U.S. taxable
bonds by foreign investors and a relatively favorable inflationary environment.
During this period, total returns were positive for municipal bonds of all
maturities. On a pre-tax basis, the municipal bond market outperformed the
taxable bond market. The LB Municipal Index gained 4.05% during the period
while the LB U.S. Aggregate Index, representing taxable bonds, gained 2.80%. As
of September 30, 2005, 20- to 30-year municipal bonds were yielding, on
average, 94.7% of comparable maturity Treasury bonds compared to an average
ratio of 92.2% last year.
_______________________________________________________________________________
2 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Interest rates are still low by historical standards versus inflation.
Therefore, Portfolio durations are still slightly below the benchmark duration
as a defensive measure. The continued low municipal yield environment has also
led to ongoing heavier-than-normal demand for lower-rated, higher-yielding
bonds as investors seek income. In the view of the Fund's Municipal Bond
Investment Team, that demand has made lower-rated bonds more expensive than
they have been on a historic basis. To take advantage of that opportunity, the
Team sold lower rated bonds and replaced them with higher quality bonds. State
and local government tax revenues have continued to improve in line with
general economic growth. The Portfolios have been positioned to benefit from
the positive impact on tax-supported debt from this improved fiscal health of
state and local governments.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 3
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com.
The investment return and principal value of an investment in the Portfolios
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolios carefully before investing. For a free
copy of the Portfolios' prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or AllianceBernstein at (800) 227-4618. You should read the prospectus
carefully before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Portfolios have been deducted. NAV returns do
not reflect sales charges; if sales charges were reflected, the Portfolios'
quoted performance would be lower. SEC returns reflect the applicable sales
charges for each share class: a 4.25% maximum front-end sales charge for Class
A shares; the applicable contingent deferred sales charge for Class B shares
(3% year 1, 2% year 2, 1% year 3, 0% year 4); a 1% 1 year contingent deferred
sales charge for Class C shares. Performance assumes reinvestment of
distributions and does not account for taxes.
Benchmark Disclosure
The unmanaged Lehman Brothers (LB) Municipal Index does not reflect fees and
expenses associated with the active management of a mutual fund portfolio. The
Index is a total return performance benchmark for the long-term investment
grade, tax-exempt bond market. An investor cannot invest directly in an index,
and its results are not indicative of the performance for any specific
investment, including the Portfolios.
A Word About Risk
Price fluctuations may be caused by changes in the general level of interest
rates or changes in bond credit quality ratings. Please note, as interest rates
rise, existing bond prices fall and can cause the value of an investment in the
Portfolios to decline. Changes in interest rates have a greater effect on bonds
with longer maturities than on those with shorter maturities. Please note that
individual state municipal portfolios are non-diversified and are subject to
geographic risk based on their narrow investment objectives. While the
Portfolios invest principally in bonds and other fixed-income securities, in
order to achieve their investment objectives, the Portfolios may at times use
certain types of investment derivatives, such as options, futures, forwards and
swaps. These instruments involve risks different from, and in certain cases,
greater than, the risks presented by more traditional investments. These risks
are fully discussed in the Portfolios' prospectus.
(Historical Performance continued on next page)
_______________________________________________________________________________
4 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
ARIZONA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE PORTFOLIO VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2005 6 Months 12 Months
- -------------------------------------------------------------------------------
Arizona Portfolio
Class A 2.92% 5.36%
- -------------------------------------------------------------------------------
Class B 2.59% 4.56%
- -------------------------------------------------------------------------------
Class C 2.58% 4.56%
- -------------------------------------------------------------------------------
LB Municipal Index 2.80% 4.05%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO
9/30/95 TO 9/30/05
Arizona Portfolio Class A at NAV: $18,321
Arizona Portfolio Class A at Offering: $17,542
LB Municipal Index: $18,016
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Arizona Portfolio
Class A at Offering LB Municipal Index
- -------------------------------------------------------------------------------
9/30/95 $ 9,575 $ 10,000
9/30/96 $ 10,231 $ 10,604
9/30/97 $ 11,307 $ 11,560
9/30/98 $ 12,395 $ 12,567
9/30/99 $ 12,348 $ 12,479
9/30/00 $ 13,113 $ 13,249
9/30/01 $ 14,236 $ 14,627
9/30/02 $ 15,277 $ 15,934
9/30/03 $ 15,636 $ 16,553
9/30/04 $ 16,674 $ 17,315
9/30/05 $ 17,542 $ 18,016
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Municipal Income Fund II Arizona Portfolio Class A shares
(from 9/30/95 to 9/30/05) as compared to the performance of the Portfolio's
benchmark. The chart assumes the reinvestment of dividends and capital gains.
See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 5
FLORIDA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE PORTFOLIO VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2005 6 Months 12 Months
- -------------------------------------------------------------------------------
Florida Portfolio
Class A 2.97% 5.01%
- -------------------------------------------------------------------------------
Class B 2.72% 4.29%
- -------------------------------------------------------------------------------
Class C 2.70% 4.38%
- -------------------------------------------------------------------------------
LB Municipal Index 2.80% 4.05%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO
9/30/95 TO 9/30/05
Florida Portfolio Class A at NAV: $18,082
Florida Portfolio Class A at Offering: $17,314
LB Municipal Index: $18,016
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Florida Portfolio
Class A at Offering LB Municipal Index
- -------------------------------------------------------------------------------
9/30/95 $ 9,575 $ 10,000
9/30/96 $ 10,290 $ 10,604
9/30/97 $ 11,333 $ 11,560
9/30/98 $ 12,349 $ 12,567
9/30/99 $ 12,179 $ 12,479
9/30/00 $ 12,805 $ 13,249
9/30/01 $ 14,047 $ 14,627
9/30/02 $ 15,055 $ 15,934
9/30/03 $ 15,588 $ 16,553
9/30/04 $ 16,489 $ 17,315
9/30/05 $ 17,314 $ 18,016
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Municipal Income Fund II Florida Portfolio Class A shares
(from 9/30/95 to 9/30/05) as compared to the performance of the Portfolio's
benchmark. The chart assumes the reinvestment of dividends and capital gains.
See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
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6 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
MASSACHUSETTS PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE PORTFOLIO VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2005 6 Months 12 Months
- -------------------------------------------------------------------------------
Massachusetts Portfolio
Class A 3.08% 4.80%
- -------------------------------------------------------------------------------
Class B 2.74% 4.00%
- -------------------------------------------------------------------------------
Class C 2.73% 3.99%
- -------------------------------------------------------------------------------
LB Municipal Index 2.80% 4.05%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO
9/30/95 TO 9/30/05
Massachusetts Portfolio Class A at NAV: $18,293
Massachusetts Portfolio Class A at Offering: $17,516
LB Municipal Index: $18,016
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Massachusetts Portfolio
Class A at Offering LB Municipal Index
- -------------------------------------------------------------------------------
9/30/95 $ 9,575 $ 10,000
9/30/96 $ 10,557 $ 10,604
9/30/97 $ 11,733 $ 11,560
9/30/98 $ 12,812 $ 12,567
9/30/99 $ 12,653 $ 12,479
9/30/00 $ 13,273 $ 13,249
9/30/01 $ 14,590 $ 14,627
9/30/02 $ 15,383 $ 15,934
9/30/03 $ 15,752 $ 16,553
9/30/04 $ 16,718 $ 17,315
9/30/05 $ 17,516 $ 18,016
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Municipal Income Fund II Massachusetts Portfolio Class A
shares (from 9/30/95 to 9/30/05) as compared to the performance of the
Portfolio's benchmark. The chart assumes the reinvestment of dividends and
capital gains.
See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 7
MICHIGAN PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE PORTFOLIO VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2005 6 Months 12 Months
- -------------------------------------------------------------------------------
Michigan Portfolio
Class A 3.12% 5.16%
- -------------------------------------------------------------------------------
Class B 2.70% 4.47%
- -------------------------------------------------------------------------------
Class C 2.77% 4.54%
- -------------------------------------------------------------------------------
LB Municipal Index 2.80% 4.05%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO
9/30/95 TO 9/30/05
Michigan Portfolio Class A at NAV: $18,777
Michigan Portfolio Class A at Offering: $17,979
LB Municipal Index: $18,016
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Michigan Portfolio
Class A at Offering LB Municipal Index
- -------------------------------------------------------------------------------
9/30/95 $ 9,575 $ 10,000
9/30/96 $ 10,298 $ 10,604
9/30/97 $ 11,436 $ 11,560
9/30/98 $ 12,474 $ 12,567
9/30/99 $ 12,478 $ 12,479
9/30/00 $ 13,279 $ 13,249
9/30/01 $ 14,622 $ 14,627
9/30/02 $ 15,768 $ 15,934
9/30/03 $ 16,187 $ 16,553
9/30/04 $ 17,102 $ 17,315
9/30/05 $ 17,979 $ 18,016
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Municipal Income Fund II Michigan Portfolio Class A shares
(from 9/30/95 to 9/30/05) as compared to the performance of the Portfolio's
benchmark. The chart assumes the reinvestment of dividends and capital gains.
See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
8 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
MINNESOTA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE PORTFOLIO VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2005 6 Months 12 Months
- -------------------------------------------------------------------------------
Minnesota Portfolio
Class A 2.70% 4.72%
- -------------------------------------------------------------------------------
Class B 2.43% 3.99%
- -------------------------------------------------------------------------------
Class C 2.33% 3.98%
- -------------------------------------------------------------------------------
LB Municipal Index 2.80% 4.05%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO
9/30/95 TO 9/30/05
Minnesota Portfolio Class A at NAV: $17,754
Minnesota Portfolio Class A at Offering: $17,000
LB Municipal Index: $18,016
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Minnesota Portfolio
Class A at Offering LB Municipal Index
- -------------------------------------------------------------------------------
9/30/95 $ 9,575 $ 10,000
9/30/96 $ 10,241 $ 10,604
9/30/97 $ 11,258 $ 11,560
9/30/98 $ 12,152 $ 12,567
9/30/99 $ 12,094 $ 12,479
9/30/00 $ 12,834 $ 13,249
9/30/01 $ 14,046 $ 14,627
9/30/02 $ 15,089 $ 15,934
9/30/03 $ 15,549 $ 16,553
9/30/04 $ 16,235 $ 17,315
9/30/05 $ 17,000 $ 18,016
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Municipal Income Fund II Minnesota Portfolio Class A shares
(from 9/30/95 to 9/30/05) as compared to the performance of the Portfolio's
benchmark. The chart assumes the reinvestment of dividends and capital gains.
See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 9
NEW JERSEY PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE PORTFOLIO VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2004 6 Months 12 Months
- -------------------------------------------------------------------------------
New Jersey Portfolio
Class A 2.77% 5.03%
- -------------------------------------------------------------------------------
Class B 2.31% 4.30%
- -------------------------------------------------------------------------------
Class C 2.32% 4.31%
- -------------------------------------------------------------------------------
LB Municipal Index 2.80% 4.05%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO
9/30/95 TO 9/30/05
New Jersey Portfolio Class A at NAV: $16,906
New Jersey Portfolio Class A at Offering: $16,187
LB Municipal Index: $18,016
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
New Jersey Portfolio
Class A at Offering LB Municipal Index
- -------------------------------------------------------------------------------
9/30/95 $ 9,575 $ 10,000
9/30/96 $ 10,205 $ 10,604
9/30/97 $ 11,227 $ 11,560
9/30/98 $ 12,165 $ 12,567
9/30/99 $ 12,130 $ 12,479
9/30/00 $ 12,779 $ 13,249
9/30/01 $ 13,715 $ 14,627
9/30/02 $ 14,319 $ 15,934
9/30/03 $ 14,663 $ 16,553
9/30/04 $ 15,403 $ 17,315
9/30/05 $ 16,187 $ 18,016
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Municipal Income Fund II New Jersey Portfolio Class A shares
(from 9/30/95 to 9/30/05) as compared to the performance of the Portfolio's
benchmark.
See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
10 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
OHIO PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE PORTFOLIO VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2005 6 Months 12 Months
- -------------------------------------------------------------------------------
Ohio Portfolio
Class A 2.81% 4.67%
- -------------------------------------------------------------------------------
Class B 2.35% 3.95%
- -------------------------------------------------------------------------------
Class C 2.35% 3.94%
- -------------------------------------------------------------------------------
LB Municipal Index 2.80% 4.05%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO
9/30/95 TO 9/30/05
Ohio Portfolio Class A at NAV: $17,662
Ohio Portfolio Class A at Offering: $16,912
LB Municipal Index: $18,016
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Ohio Portfolio
Class A at Offering LB Municipal Index
- -------------------------------------------------------------------------------
9/30/95 $ 9,575 $ 10,000
9/30/96 $ 10,220 $ 10,604
9/30/97 $ 11,406 $ 11,560
9/30/98 $ 12,353 $ 12,567
9/30/99 $ 12,266 $ 12,479
9/30/00 $ 12,828 $ 13,249
9/30/01 $ 13,859 $ 14,627
9/30/02 $ 14,628 $ 15,934
9/30/03 $ 15,389 $ 16,553
9/30/04 $ 16,162 $ 17,315
9/30/05 $ 16,912 $ 18,016
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Municipal Income Fund II Ohio Portfolio Class A shares (from
9/30/95 to 9/30/05) as compared to the performance of the Portfolio's
benchmark. The chart assumes the reinvestment of dividends and capital gains.
See Historical Performance and Benchmark disclosures on page 4.
Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 11
PENNSYLVANIA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE PORTFOLIO VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2005 6 Months 12 Months
- -------------------------------------------------------------------------------
Pennsylvania Portfolio
Class A 3.08% 4.75%
- -------------------------------------------------------------------------------
Class B 2.72% 4.01%
- -------------------------------------------------------------------------------
Class C 2.72% 4.02%
- -------------------------------------------------------------------------------
LB Municipal Index 2.80% 4.05%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO
9/30/95 TO 9/30/05
Pennsylvania Portfolio Class A at NAV: $18,138
Pennsylvania Portfolio Class A at Offering: $17,367
LB Municipal Index: $18,016
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Pennsylvania Portfolio
Class A at Offering LB Municipal Index
- -------------------------------------------------------------------------------
9/30/95 $ 9,575 $ 10,000
9/30/96 $ 10,358 $ 10,604
9/30/97 $ 11,482 $ 11,560
9/30/98 $ 12,483 $ 12,567
9/30/99 $ 12,180 $ 12,479
9/30/00 $ 12,836 $ 13,249
9/30/01 $ 14,263 $ 14,627
9/30/02 $ 15,240 $ 15,934
9/30/03 $ 15,785 $ 16,553
9/30/04 $ 16,584 $ 17,315
9/30/05 $ 17,367 $ 18,016
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Municipal Income Fund II Pennsylvania Portfolio Class A
shares (from 9/30/95 to 9/30/05) as compared to the performance of the
Portfolio's benchmark. The chart assumes the reinvestment of dividends and
capital gains.
See Historical Performance and Benchmark disclosures on page 4.
Historical Performance continued on next page)
_______________________________________________________________________________
12 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
VIRGINIA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE PORTFOLIO VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2005 6 Months 12 Months
- -------------------------------------------------------------------------------
Virginia Portfolio
Class A 3.01% 5.11%
- -------------------------------------------------------------------------------
Class B 2.63% 4.36%
- -------------------------------------------------------------------------------
Class C 2.58% 4.41%
- -------------------------------------------------------------------------------
LB Municipal Index 2.80% 4.05%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO
9/30/95 TO 9/30/05
Virginia Portfolio Class A at NAV: $18,659
Virginia Portfolio Class A at Offering: $17,866
LB Municipal Index: $18,016
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Virginia Portfolio
Class A at Offering LB Municipal Index
- -------------------------------------------------------------------------------
9/30/95 $ 9,575 $ 10,000
9/30/96 $ 10,475 $ 10,604
9/30/97 $ 11,661 $ 11,560
9/30/98 $ 12,786 $ 12,567
9/30/99 $ 12,647 $ 12,479
9/30/00 $ 13,394 $ 13,249
9/30/01 $ 14,375 $ 14,627
9/30/02 $ 15,461 $ 15,934
9/30/03 $ 16,182 $ 16,553
9/30/04 $ 16,997 $ 17,315
9/30/05 $ 17,866 $ 18,016
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Municipal Income Fund II Virginia Portfolio Class A shares
(from 9/30/95 to 9/30/05) as compared to the performance of the Portfolio's
benchmark. The chart assumes the reinvestment of dividends and capital gains.
See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 13
ARIZONA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 5.36% 0.85%
5 Years 6.03% 5.12%
10 Years 6.24% 5.78%
SEC Yield* 3.56%
Taxable Equivalent Yield** 6.92%
Class B Shares
1 Year 4.56% 1.56%
5 Years 5.29% 5.29%
10 Years(a) 5.80% 5.80%
SEC Yield* 3.02%
Taxable Equivalent Yield** 5.64%
Class C Shares
1 Year 4.56% 3.56%
5 Years 5.29% 5.29%
10 Years 5.50% 5.50%
SEC Yield* 3.02%
Taxable Equivalent Yield** 5.57%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 0.85%
5 Years 5.12%
10 Years 5.78%
Class B Shares
1 Year 1.56%
5 Years 5.29%
10 Years(a) 5.80%
Class C Shares
1 Year 3.56%
5 Years 5.29%
10 Years 5.50%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended September 30, 2005.
** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
14 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
FLORIDA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 5.01% 0.59%
5 Years 6.23% 5.32%
10 Years 6.10% 5.64%
SEC Yield* 3.63%
Taxable Equivalent Yield** 7.66%
Class B Shares
1 Year 4.29% 1.29%
5 Years 5.49% 5.49%
10 Years(a) 5.66% 5.66%
SEC Yield* 3.08%
Taxable Equivalent Yield** 5.77%
Class C Shares
1 Year 4.38% 3.38%
5 Years 5.49% 5.49%
10 Years 5.36% 5.36%
SEC Yield* 3.09%
Taxable Equivalent Yield** 5.77%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 0.59%
5 Years 5.32%
10 Years 5.64%
Class B Shares
1 Year 1.29%
5 Years 5.49%
10 Years(a) 5.66%
Class C Shares
1 Year 3.38%
5 Years 5.49%
10 Years 5.36%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended September 30, 2005.
** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 15
MASSACHUSETTS PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 4.80% 0.39%
5 Years 5.72% 4.80%
10 Years 6.23% 5.76%
SEC Yield* 3.33%
Taxable Equivalent Yield** 7.20%
Class B Shares
1 Year 4.00% 1.00%
5 Years 5.00% 5.00%
10 Years(a) 5.80% 5.80%
SEC Yield* 2.78%
Taxable Equivalent Yield** 5.80%
Class C Shares
1 Year 3.99% 2.99%
5 Years 5.00% 5.00%
10 Years 5.51% 5.51%
SEC Yield* 2.78%
Taxable Equivalent Yield** 5.75%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 0.39%
5 Years 4.80%
10 Years 5.76%
Class B Shares
1 Year 1.00%
5 Years 5.00%
10 Years(a) 5.80%
Class C Shares
1 Year 2.99%
5 Years 5.00%
10 Years 5.51%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended September 30, 2005.
** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
16 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
MICHIGAN PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 5.16% 0.68%
5 Years 6.26% 5.34%
10 Years 6.50% 6.04%
SEC Yield* 3.60%
Taxable Equivalent Yield** 7.24%
Class B Shares
1 Year 4.47% 1.47%
5 Years 5.53% 5.53%
10 Years(a) 6.05% 6.05%
SEC Yield* 2.95%
Taxable Equivalent Yield** 5.68%
Class C Shares
1 Year 4.54% 3.54%
5 Years 5.56% 5.56%
10 Years 5.77% 5.77%
SEC Yield* 3.01%
Taxable Equivalent Yield** 5.67%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 0.68%
5 Years 5.34%
10 Years 6.04%
Class B Shares
1 Year 1.47%
5 Years 5.53%
10 Years(a) 6.05%
Class C Shares
1 Year 3.54%
5 Years 5.56%
10 Years 5.77%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended September 30, 2005.
** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 17
MINNESOTA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 4.72% 0.27%
5 Years 5.79% 4.88%
10 Years 5.91% 5.45%
SEC Yield* 3.40%
Taxable Equivalent Yield** 7.68%
Class B Shares
1 Year 3.99% 0.99%
5 Years 5.07% 5.07%
10 Years(a) 5.44% 5.44%
SEC Yield* 2.85%
Taxable Equivalent Yield** 5.63%
Class C Shares
1 Year 3.98% 2.98%
5 Years 5.08% 5.08%
10 Years 5.16% 5.16%
SEC Yield* 2.84%
Taxable Equivalent Yield** 5.61%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 0.27%
5 Years 4.88%
10 Years 5.45%
Class B Shares
1 Year 0.99%
5 Years 5.07%
10 Years(a) 5.44%
Class C Shares
1 Year 2.98%
5 Years 5.08%
10 Years 5.16%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended September 30, 2005.
** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
18 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
NEW JERSEY PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 5.03% 0.53%
5 Years 4.85% 3.95%
10 Years 5.39% 4.93%
SEC Yield* 3.48%
Taxable Equivalent Yield** 8.48%
Class B Shares
1 Year 4.30% 1.30%
5 Years 4.11% 4.11%
10 Years(a) 4.93% 4.93%
SEC Yield* 2.93%
Taxable Equivalent Yield** 6.08%
Class C Shares
1 Year 4.31% 3.31%
5 Years 4.09% 4.09%
10 Years 4.63% 4.63%
SEC Yield* 2.93%
Taxable Equivalent Yield** 6.13%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 0.53%
5 Years 3.95%
10 Years 4.93%
Class B Shares
1 Year 1.30%
5 Years 4.11%
10 Years(a) 4.93%
Class C Shares
1 Year 3.31%
5 Years 4.09%
10 Years 4.63%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended September 30, 2005.
** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 19
OHIO PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 4.67% 0.21%
5 Years 5.69% 4.79%
10 Years 5.85% 5.40%
SEC Yield* 3.50%
Taxable Equivalent Yield** 7.94%
Class B Shares
1 Year 3.95% 0.95%
5 Years 4.96% 4.96%
10 Years(a) 5.39% 5.39%
SEC Yield* 2.95%
Taxable Equivalent Yield** 5.83%
Class C Shares
1 Year 3.94% 2.94%
5 Years 4.95% 4.95%
10 Years 5.09% 5.09%
SEC Yield* 2.95%
Taxable Equivalent Yield** 5.85%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 0.21%
5 Years 4.79%
10 Years 5.40%
Class B Shares
1 Year 0.95%
5 Years 4.96%
10 Years(a) 5.39%
Class C Shares
1 Year 2.94%
5 Years 4.95%
10 Years 5.09%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended September 30, 2005.
** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
20 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
PENNSYLVANIA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 4.75% 0.25%
5 Years 6.24% 5.32%
10 Years 6.14% 5.67%
SEC Yield* 3.57%
Taxable Equivalent Yield** 7.24%
Class B Shares
1 Year 4.01% 1.01%
5 Years 5.51% 5.51%
10 Years(a) 5.67% 5.67%
SEC Yield* 3.02%
Taxable Equivalent Yield** 5.49%
Class C Shares
1 Year 4.02% 3.02%
5 Years 5.51% 5.51%
10 Years 5.38% 5.38%
SEC Yield* 3.03%
Taxable Equivalent Yield** 5.51%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 0.25%
5 Years 5.32%
10 Years 5.67%
Class B Shares
1 Year 1.01%
5 Years 5.51%
10 Years(a) 5.67%
Class C Shares
1 Year 3.02%
5 Years 5.51%
10 Years 5.38%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended September 30, 2005.
** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 21
VIRGINIA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 5.11% 0.62%
5 Years 5.93% 5.02%
10 Years 6.43% 5.97%
SEC Yield* 3.46%
Taxable Equivalent Yield** 7.74%
Class B Shares
1 Year 4.36% 1.36%
5 Years 5.20% 5.20%
10 Years(a) 6.01% 6.01%
SEC Yield* 2.92%
Taxable Equivalent Yield** 6.04%
Class C Shares
1 Year 4.41% 3.41%
5 Years 5.21% 5.21%
10 Years 5.70% 5.70%
SEC Yield* 2.92%
Taxable Equivalent Yield** 6.20%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 0.62%
5 Years 5.02%
10 Years 5.97%
Class B Shares
1 Year 1.36%
5 Years 5.20%
10 Years(a) 6.01%
Class C Shares
1 Year 3.41%
5 Years 5.21%
10 Years 5.70%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended September 30, 2005.
** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
_______________________________________________________________________________
22 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Arizona Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
- -------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,029.20 $3.97
Hypothetical (5% return before expenses) $1,000 $1,021.16 $3.95
- -------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,025.86 $7.52
Hypothetical (5% return before expenses) $1,000 $1,017.65 $7.49
- -------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,025.78 $7.52
Hypothetical (5% return before expenses) $1,000 $1,017.65 $7.49
- -------------------------------------------------------------------------------------
(Fund Expenses continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 23
FUND EXPENSES
(continued from previous page)
Florida Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
- -------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,029.69 $3.97
Hypothetical (5% return before expenses) $1,000 $1,021.16 $3.95
- -------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,027.21 $7.52
Hypothetical (5% return before expenses) $1,000 $1,017.65 $7.49
- -------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,027.02 $7.52
Hypothetical (5% return before expenses) $1,000 $1,017.65 $7.49
- -------------------------------------------------------------------------------------
Massachusetts Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
- -------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,030.80 $4.17
Hypothetical (5% return before expenses) $1,000 $1,020.96 $4.15
- -------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,027.38 $7.73
Hypothetical (5% return before expenses) $1,000 $1,017.45 $7.69
- -------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,027.27 $7.72
Hypothetical (5% return before expenses) $1,000 $1,017.45 $7.69
- -------------------------------------------------------------------------------------
Michigan Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
- -------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,031.22 $5.04
Hypothetical (5% return before expenses) $1,000 $1,020.10 $5.01
- -------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,026.99 $8.64
Hypothetical (5% return before expenses) $1,000 $1,016.55 $8.59
- -------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,027.69 $8.64
Hypothetical (5% return before expenses) $1,000 $1,016.55 $8.59
- -------------------------------------------------------------------------------------
(Fund Expenses continued on next page)
_______________________________________________________________________________
24 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
FUND EXPENSES
(continued from previous page)
Minnesota Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
- -------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,026.96 $4.57
Hypothetical (5% return before expenses) $1,000 $1,020.56 $4.56
- -------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,024.29 $8.12
Hypothetical (5% return before expenses) $1,000 $1,017.05 $8.09
- -------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,023.29 $8.12
Hypothetical (5% return before expenses) $1,000 $1,017.05 $8.09
- -------------------------------------------------------------------------------------
New Jersey Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
- -------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,027.73 $4.42
Hypothetical (5% return before expenses) $1,000 $1,020.71 $4.41
- -------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,023.07 $7.96
Hypothetical (5% return before expenses) $1,000 $1,017.20 $7.94
- -------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,023.16 $7.96
Hypothetical (5% return before expenses) $1,000 $1,017.20 $7.94
- -------------------------------------------------------------------------------------
Ohio Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
- -------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,028.13 $4.32
Hypothetical (5% return before expenses) $1,000 $1,020.81 $4.31
- -------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,023.51 $7.86
Hypothetical (5% return before expenses) $1,000 $1,017.30 $7.84
- -------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,023.50 $7.86
Hypothetical (5% return before expenses) $1,000 $1,017.30 $7.84
- -------------------------------------------------------------------------------------
(Fund Expenses continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 25
FUND EXPENSES
(continued from previous page)
Pennsylvania Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
- -------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,030.80 $4.84
Hypothetical (5% return before expenses) $1,000 $1,020.31 $4.81
- -------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,027.15 $8.38
Hypothetical (5% return before expenses) $1,000 $1,016.80 $8.34
- -------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,027.19 $8.39
Hypothetical (5% return before expenses) $1,000 $1,016.80 $8.34
- -------------------------------------------------------------------------------------
Virginia Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
- -------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,030.11 $3.66
Hypothetical (5% return before expenses) $1,000 $1,021.46 $3.65
- -------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,026.31 $7.21
Hypothetical (5% return before expenses) $1,000 $1,017.95 $7.18
- -------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,025.83 $7.21
Hypothetical (5% return before expenses) $1,000 $1,017.95 $7.18
- -------------------------------------------------------------------------------------
* Expenses are equal to each Class' annualized expense ratio, shown in the
table below, multiplied by the average account value over the period,
multiplied by the number of days in the most recent fiscal half-year/365 (to
reflect the one-half year period).
Annualized Expense Ratio
--------------------------------------------------
Class A Class B Class C
- -------------------------------------------------------------------------------
Arizona Portfolio 0.78% 1.48% 1.48%
Florida Portfolio 0.78% 1.48% 1.48%
Massachusetts Portfolio 0.82% 1.52% 1.52%
Michigan Portfolio 0.99% 1.70% 1.70%
Minnesota Portfolio 0.90% 1.60% 1.60%
New Jersey Portfolio 0.87% 1.57% 1.57%
Ohio Portfolio 0.85% 1.55% 1.55%
Pennsylvania Portfolio 0.95% 1.65% 1.65%
Virginia Portfolio 0.72% 1.42% 1.42%
- -------------------------------------------------------------------------------
_______________________________________________________________________________
26 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
BOND RATING SUMMARY*
September 30, 2005
ARIZONA PORTFOLIO
Quality Rating
63.6% AAA
7.9% AA
6.8% A [PIE CHART OMITTED]
15.2% BBB
6.5% BB
FLORIDA PORTFOLIO
Quality Rating
51.9% AAA
16.1% AA
11.1% A [PIE CHART OMITTED]
9.0% BBB
11.9% BB
MASSACHUSETTS PORTFOLIO
Quality Rating
61.4% AAA
18.9% AA
5.0% A [PIE CHART OMITTED]
9.6% BBB
5.1% BB
* All data are as of September 30, 2005. Each Portfolio's quality rating
distribution is expressed as a percentage of the Portfolio's total investments
rated in particular ratings categories by Standard & Poor's Rating Services and
Moody's Investors Service. The distributions may vary over time. If ratings are
not available, the Fund's Adviser will assign ratings that are considered to be
of equivalent quality to such ratings.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 27
BOND RATING SUMMARY*
September 30, 2005
MICHIGAN PORTFOLIO
Quality Rating
61.6% AAA
14.8% AA
4.4% A [PIE CHART OMITTED]
9.4% BBB
9.8% BB
MINNESOTA PORTFOLIO
Quality Rating
59.5% AAA
11.1% AA
19.0% A [PIE CHART OMITTED]
6.7% BBB
3.7% BB
NEW JERSEY PORTFOLIO
Quality Rating
52.9% AAA
18.8% AA
13.7% A [PIE CHART OMITTED]
8.8% BBB
5.8% BB
* All data are as of September 30, 2005. Each Portfolio's quality rating
distribution is expressed as a percentage of the Portfolio's total investments
rated in particular ratings categories by Standard & Poor's Rating Services and
Moody's Investors Service. The distributions may vary over time. If ratings are
not available, the Fund's Adviser will assign ratings that are considered to be
of equivalent quality to such ratings.
_______________________________________________________________________________
28 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
BOND RATING SUMMARY*
September 30, 2005
OHIO PORTFOLIO
Quality Rating
55.9% AAA
10.3% AA
18.9% A [PIE CHART OMITTED]
9.2% BBB
5.7% BB
PENNSYLVANIA PORTFOLIO
Quality Rating
49.4% AAA
21.2% AA
12.9% A [PIE CHART OMITTED]
7.2% BBB
9.0% BB
0.3% B
VIRGINIA PORTFOLIO
Quality Rating
54.0% AAA
23.8% AA
10.0% A [PIE CHART OMITTED]
2.8% BBB
9.4% BB
* All data are as of September 30, 2005. Each Portfolio's quality rating
distribution is expressed as a percentage of the Portfolio's total investments
rated in particular ratings categories by Standard & Poor's Rating Services and
Moody's Investors Service. The distributions may vary over time. If ratings are
not available, the Fund's Adviser will assign ratings that are considered to be
of equivalent quality to such ratings.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 29
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.7%
Long-Term Municipal Bonds-96.5%
Arizona-84.6%
Arizona Cap Facs Fin Corp Student Hsg Rev
(Arizona St Univ Proj) Ser 00
6.25%, 9/01/32 $ 2,000 $ 2,079,740
Arizona Health Facs Auth Rev
(Blood System, Inc.) Ser 04
5.00%, 4/01/19 750 778,358
Arizona State Transn Brd Hwy Rev
Ser 04B
5.00%, 7/01/24 4,300 4,562,085
Arizona School Brd Fac Rev
Ser 01
5.00%, 7/01/19 6,730 7,294,108
AMBAC Ser 04
8.64%, 7/01/16(a)(b) 5,000 6,534,300
Arizona State Univ Ctfs Partn
(Research Infrastucture Projs)
AMBAC Ser 05A
5.00%, 9/01/23(c) 2,000 2,116,820
Arizona State Univ System Revs
AMBAC Ser 05
5.00%, 7/01/21-7/01/26 6,010 6,417,240
Arizona Student Loan Auth
(Student Loan Rev)
Ser 99B-1 AMT
5.90%, 5/01/24 1,500 1,596,540
Arizona Tourism & Sports Auth Tax Rev
(Multipurpose Stadium Fac) MBIA Ser 03A
5.00%, 7/01/25 2,400 2,525,592
Estrella Mtn Ranch Cmnty Fac Dist
(Desert Village)
7.375%, 7/01/27 1,833 1,988,182
(Golf Village) Ser 01A
7.875%, 7/01/25 3,593 3,954,420
Gilbert Wtr Res Mun Ppty Corp.
(Wastewater Sys & Util Rev) Ser 04
4.90%, 4/01/19 2,500 2,499,975
Glendale IDA Ed Fac
(Midwestern Univ) Ser 01A
5.875%, 5/15/31 3,770 4,063,419
(Midwestern Univ) CONNIE LEE
Ser 96A
6.00%, 5/15/26 475 491,872
Goodyear Cmnty Fac Dist
(Palm Valley) Ser 96C
7.25%, 7/01/16 3,009 3,116,903
_______________________________________________________________________________
30 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Goodyear IDA Water & Sewer Rev
(Litchfield Pk Svc Proj) Ser 99 AMT
5.95%, 10/01/23 $ 3,160 $ 3,255,053
Greater Arizona Dev Auth Infrastructure Rev
MBIA Ser 05A
5.00%, 8/01/21 1,600 1,712,704
MBIA Series 05B
5.00%, 8/01/25 4,320 4,577,688
Hassayampa Cmnty Fac District
Ser 96
7.75%, 7/01/21 2,915 3,062,499
Hassayampa Cmnty Fac District #2
(Forest Ridge Estates) Ser 00
7.50%, 7/01/24 835 917,172
Maricopa Cnty MFHR
(Tierra Antigua Proj)
AMBAC Ser 01A-1 AMT
5.40%, 6/01/34 2,765 2,825,719
Maricopa Cnty SFMR
(Mortgage Rev)
GNMA/FNMA/FHLMC AMT
Ser 00-1C
6.25%, 12/01/30 180 184,837
Ser 01
5.63%, 3/01/33 1,205 1,239,740
Ser 02-B1
6.20%, 3/01/34 745 768,698
Mesa Arizona Street & Highway Rev FSA
Ser 05
5.00%, 7/01/24 5,000 5,304,400
Mesa Cnty IDA Health Fac
(Discovery Hlth Sys) MBIA Ser 99A
5.75%, 1/01/25 15,000 16,547,249
Mohave Cnty IDA MFHR
(Chris & Silver Ridge) GNMA Ser 96
6.375%, 11/01/31 295 308,656
Nogales Arizona Municipal Dev Auth
AMBAC Ser05
5.00%, 6/01/27 1,000 1,040,340
Northern Arizona University Ctfs Partn
(Northern Arizona University Research Projs)
AMBAC Ser 04
5.125%, 9/01/21-9/01/24 7,140 7,692,490
Phoenix Arizona Civic Impt Corp Water
Systems Rev
MBIA Ser05
5.00%, 7/01/23 5,000 5,320,850
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 31
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Phoenix Hlth Facs Auth Hosp Rev
(Children's Hospital) Ser 02A
6.00%, 2/15/32 $ 5,700 $ 5,790,345
Phoenix IDA SFMR
(Mortgage Rev) GNMA Ser 02A-1 AMT
5.75%, 9/01/33 330 338,623
Pima Cnty IDA MFHR
(La Hacienda) GNMA Ser 99
7.00%, 12/20/31 1,290 1,393,587
Pima Cnty IDA SFMR
(Mortgage Rev) GNMA/FNMA AMT
Ser 01A-1
5.35%, 11/01/24 170 171,290
Ser 99B-1
6.10%, 5/01/31 190 196,760
Pima Cnty IDA Ed Rev
(Horizon Cmnty Learning Ctr) Ser 05
5.125%, 6/01/20 1,500 1,532,490
Pinal Cnty Ctfs Partn
Ser 04
5.00%, 12/01/24 3,780 3,917,441
Pinal Cnty Prop Corp.
AMBAC Ser 01
5.125%, 6/01/21 1,000 1,062,290
Pronghorn Ranch Cmnty Fac Dist
Ser 01
7.00%, 7/15/27 2,000 2,102,520
Show Low Assessment Dist #6
(Torreon) ACA Ser 00
6.00%, 1/01/18 960 1,029,427
Show Low IDA Hosp Rev
(Navapache Regl Med Ctr) RADIAN Ser 05
5.00%, 12/01/25 1,415 1,462,742
Stoneridge Cmnty Fac Dist
Ser 01
6.75%, 7/15/26 3,250 3,505,873
Sundance Cmnty Fac Dist
Ser 02
7.75%, 7/01/22 2,800 3,098,564
Tax Exempt Municipal Infrastructure Trust
Ser 04B Cl. A
4.05%, 12/01/08(b) 4,470 4,380,332
Tempe Arizona Excise Tax Rev
5.00%, 7/01/24 1,035 1,099,708
Tolleson IDA MFHR
(Copper Cove) GNMA Ser 01A AMT
5.50%, 11/20/41 5,825 5,999,459
_______________________________________________________________________________
32 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Tucson & Pima Hsg Fin Auth SFMR
(Mortgage Rev) GNMA/FNMA AMT
Ser 01
6.35%, 1/01/34 $ 1,635 $ 1,676,954
Ser 02A
5.50%, 1/01/35 750 769,388
Tucson Airport Auth Rev
AMBAC Ser 01 AMT
5.35%, 6/01/31 6,475 6,736,913
Tucson Arizona COP
MBIA Ser 04A
5.00%, 7/01/23-7/01/24 6,100 6,448,695
Tucson Higher Ed
(University Arizona) AMBAC Ser 02A
5.00%, 7/15/32 1,000 1,034,180
University of Arizona Ctfs Partn
AMBAC Ser 03
7.43%, 6/01/15(a)(b) 4,020 4,810,091
West Campus Hsg LLC Arizona Student Hsg Rev
(Arizona State University West Campus)
AMBAC Ser 05
5.00%, 7/01/30 1,500 1,572,990
Yavapai Cnty Hosp Rev
(Regional Medical Center) RADIAN
Ser 03A
5.25%, 8/01/21 4,000 4,203,800
-------------
169,112,111
-------------
California-0.7%
California State GO
5.00%, 2/01/33 1,405 1,451,449
-------------
Florida-1.0%
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,000 1,080,160
Fiddler's Creek Cmnty Dev Dist
Ser 99B
5.80%, 5/01/21 890 923,517
-------------
2,003,677
-------------
Kansas-0.3%
Wyandotte Cnty/Kansas City Unified Govt Spl
Oblig Rev
(Sales Tax Second Lien) Ser 05B
5.00%, 12/01/20 500 512,755
-------------
Puerto Rico-8.3%
Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22(d) 8,000 8,636,480
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 33
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Puerto Rico GO
FGIC Ser 02A
5.00%, 7/01/32 $ 2,500 $ 2,727,950
Puerto Rico Hwy & Trans Auth Rev
FSA Ser 02D
5.00%, 7/01/32 3,400 3,541,780
Puerto Rico Ind Fin Auth Hlth Fac
(Ascension Health) Ser 00A
6.125%, 11/15/30 1,500 1,678,860
-------------
16,585,070
-------------
Texas-1.0%
Texas Turnpike Auth Rev
AMBAC Ser 02A
5.50%, 8/15/39 1,750 1,889,703
-------------
Virgin Islands-0.6%
Virgin Islands Pub Fin Auth Rev
ACA Ser 03
5.00%, 10/01/31 1,250 1,285,538
-------------
Total Long-Term Municipal Bonds
(cost $185,365,992) 192,840,303
-------------
Short-Term Municipal Notes(e)-2.2%
Alaska-0.8%
Valdez Marine Term Rev
(BP Pipelines Project) Ser 03B
2.83%, 7/01/37 1,500 1,500,000
-------------
Nevada-1.2%
Clark Cnty Sch Dist GO
FSA Ser 01A
2.80%, 6/15/21 2,500 2,500,000
-------------
New York-0.2%
City of New York
LOC Ser 93-E4
2.80%, 8/01/21 500 500,000
-------------
Total Short-Term Municipal Notes
(cost $4,500,000) 4,500,000
-------------
Total Municipal Bonds & Notes
(cost $189,865,992) 197,340,303
-------------
_______________________________________________________________________________
34 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT-0.1%
Time Deposit-0.1%
The Bank of New York
2.75%, 10/03/05
(cost $228,000) $ 228 $ 228,000
-------------
Total Investments-98.8%
(cost $190,093,992) 197,568,303
Other assets less liabilities-1.2% 2,316,268
-------------
Net Assets-100% $ 199,884,571
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original September 30, Unrealized
Type Contracts Position Month Value 2005 Appreciation
- -------------------- ----------- ------------ ----------- ------------ -------------- ----------------
U.S. Treasury Note December
10 Yr Futures 26 Short 2005 $ 2,883,668 $ 2,857,969 $ 25,699
U.S. Treasury Note December
10 Yr Swap Future 21 Short 2005 2,326,328 2,296,875 29,453
--------
$ 55,152
=========
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- -------------------- ------------ ------------- -------------- --------------- ----------------
Citigroup, Inc. $1,900 6/22/07 BMA* 2.96% $ (10,206)
76.48% of
Goldman Sachs & Co. 11,100 2/03/06 1 Month LIBOR+ BMA* (9,634)
JPMorgan Chase & Co. 1,800 4/05/07 BMA* 2.988% (4,940)
85.10% of
Merrill Lynch 11,100 2/03/06 BMA* 1 Month LIBOR+ 25,335
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 35
(a) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At September 30, 2005, the aggregate market value of these securities
amounted to $15,724,723 or 7.9% of net assets.
(c) Position, or portion thereof with an aggregate market value of $52,921 has
been segregated to collateralize margin requirements for open futures contracts.
(d) Represents entire or partial position segregated as collateral for
interest rate swap.
(e) Variable rate coupon, rate shown as of September 30, 2005.
Glossary of Terms:
ACA - American Capital Access
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
CONNIE LEE - Connie Lee Insurance Company
COP - Certificate of Participation
FGIC - Financial Guaranty Insurance Company
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
IDA - Industrial Development Authority
LOC - Line Of Credit
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
XLCA - XL Capital Assurance, Inc.
See notes to financial statements.
_______________________________________________________________________________
36 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.5%
Long-Term Municipal Bonds-91.7%
Florida-84.3%
Beacon Tradeport Cmnty Dev Dist
Ser 02B
7.25%, 5/01/33 $ 970 $ 1,039,423
Bonnet Creek Resort Cmnty Dev Dist
Ser 02
7.25%, 5/01/18 2,000 2,131,360
Capital Trust Agy Arpt Fac
(Cargo Acq Grp)
Ser 02 AMT
6.25%, 1/01/19 500 509,770
Ser 03 AMT
5.75%, 1/01/32 2,000 1,994,800
Concorde Estates Cmnty Dev Dist
Ser 04B
5.00%, 5/01/11 1,600 1,606,688
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,240 2,373,482
Dade Cnty Hsg Fin Auth MFHR
(Golden Lakes Apts) Ser 97A AMT
6.00%, 11/01/32 250 256,508
6.05%, 11/01/39 750 770,880
Deltona Util Sys Rev
MBIA Ser 03
5.125%, 10/01/27 2,440 2,579,958
Escambia Cnty PCR
(Champion Int'l Corp) Ser 96 AMT
6.40%, 9/01/30 5,000 5,157,900
Florida Hsg Fin Agy MFHR
(Turtle Creek Apts) AMBAC Ser 96C AMT
6.20%, 5/01/36 3,245 3,331,317
Florida Hsg Fin Corp MFHR
(Cobblestone Apts)
GNMA Ser 00K-1 AMT
6.10%, 6/01/42 7,780 8,269,673
(Logans Pointe Apts) FSA Ser 99 AMT
6.00%, 6/01/39 5,080 5,343,855
(Mystic Pointe II) GNMA Ser 00 AMT
6.30%, 12/01/41 1,165 1,244,127
(Raintree Apts) GNMA Ser 00 AMT
6.05%, 3/01/42(a) 5,800 6,096,380
(Sabal Chase Apts) FSA Ser 00 AMT
6.00%, 5/01/40 3,650 3,858,342
(Spring Harbor Apts) Ser 99C-1 AMT
5.90%, 8/01/39 2,540 2,613,101
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 37
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
(Walker Ave Club) FSA Ser 00L-1 AMT
6.00%, 12/01/38 $ 3,435 $ 3,582,808
(Waverly Apts) FSA Ser 00C-1 AMT
6.50%, 7/01/40 2,790 2,973,080
Florida State Correctional Privatization
Comm COP
AMBAC Ser 04B
5.00%, 8/01/24 3,330 3,532,064
Florida State Brd of Ed Lottery Rev
Ser 03A
5.00%, 7/01/19 4,890 5,264,574
Florida State Brd of Ed GO
MBIA Ser 02A
5.00%, 6/01/32 2,500 2,601,400
Gateway Cmnty Dev Dist
(Sun City) Ser 03B
5.50%, 5/01/10 590 599,245
Hamal Cmnty Dev Dist
Ser 01
6.65%, 5/01/21 1,100 1,154,846
Herons Glen Recreation Dist
Ser 99
5.90%, 5/01/19 2,680 2,761,847
Highlands Cnty Hlth Facs Auth
(Adventist/Sunbelt Hosp) Ser 01A
6.00%, 11/15/31 2,000 2,174,980
Hillsborough Cnty Fla Rev
(Tampa Bay Arena)
5.00%, 10/01/25 3,000 3,171,570
Indian Trace Dev Dist Special Assessment
(Water Management Special Benefit)
MBIA Ser 05
5.00%, 5/01/22 680 727,505
Jacksonville Electrical Auth
AMBAC Ser 02B
5.00%, 10/01/26 3,925 4,108,612
MBIA Ser 02A
5.50%, 10/01/41 5,000 5,161,450
Series 02A
5.50%, 10/01/41 3,750 3,935,625
Lakeland Water & Wastewater Floater Rev
Ser 04
7.427%, 10/01/10(b)(c) 5,000 5,611,600
Lee Cnty Arpt Rev
(Southwest Int'l Arpt) FSA Ser 00A AMT
6.00%, 10/01/32 13,500 14,788,844
Lee Cnty Transn Facs
(Sanibel Brdgs & Causeway) CIFG Ser 05B
5.00%, 10/01/30 700 734,804
_______________________________________________________________________________
38 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Lee Cnty Hlth Facs Auth Rev
(Shell Point) Ser 99A
5.50%, 11/15/29 $ 2,000 $ 2,024,900
Manatee Cnty Hsg Fin Agy SFMR
(Mortgage Rev) GNMA
Ser 96-1 AMT
5.625%, 11/01/14 65 65,081
Ser 99 AMT
6.25%, 11/01/28 675 683,525
Marshall Creek Cmnty Dev Dist
Ser 02A
6.625%, 5/01/32 1,000 1,055,320
Miami Beach Health Facs Auth Rev
(Mt Sinai Med Ctr) Ser 01A
6.80%, 11/15/31 4,100 4,463,588
Miami-Dade Cnty Hsg Fin Auth MFHR
(Cntry Club Villas Apts) Ser 99A AMT
6.20%, 10/01/39 5,145 5,390,417
(Marbrisa Apts) FSA Ser 00-2A AMT
6.15%, 8/01/38 1,515 1,613,930
Miami-Dade Cnty Hsg Fin Auth SFMR
(Home Ownership Mortgage) GNMA/FNMA
Ser 00A-1 AMT
6.00%, 10/01/32 1,060 1,081,783
Miromar Lakes Cmnty Dev Dist
Ser 00A
7.25%, 5/01/12 3,445 3,644,224
North Broward Hosp Rev
Ser 01
6.00%, 1/15/31 1,700 1,820,343
North Miami Hlth Facs Auth Rev
(Catholic Hlth Svcs Oblig Grp) Ser 96
6.00%, 8/15/24 1,200 1,237,440
Northern Palm Beach Asses Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32 1,120 1,157,688
Northern Palm Beach Cnty Impt Dist
(Mirasol Unit #43)
6.10%, 8/01/21 690 720,277
6.125%, 8/01/31 1,000 1,037,170
Orange Cnty Hospital Rev
(Orlando Regional) Ser 02
5.75%, 12/01/32 1,320 1,423,250
Orange Cnty Hsg Fin Auth MFHR
(Loma Vista Proj) Ser 99G AMT
5.50%, 3/01/32 2,000 2,002,560
Orange County Hlth Facs Auth Rev
(Mayflower Retirement Proj)
Asset Gty Ser 99
5.25%, 6/01/29 1,060 1,102,379
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 39
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Orlando Util Cmnty Wtr & Elec Rev
Ser 02C
5.00%, 10/01/27 $ 7,000 $ 7,310,240
Osceola Cnty Sch Brd Ctfs Partn
FGIC Ser 04A
5.00%, 6/01/23 2,955 3,128,370
Palm Beach Cnty IDR
(Lourdes-McKeen Residence) Ser 96
6.625%, 12/01/26 4,000 4,245,800
Preserve at Wilderness Lake
Cmnty Dev Dist
Ser 02A
7.10%, 5/01/33 1,485 1,588,252
South Miami Health Facs Hosp Rev
(Baptist Health)
5.25%, 11/15/33 2,000 2,077,380
St. Johns Cmnty Dev Dist
(Julington Creek Plantation) Ser 97
7.125%, 5/01/19 7,725 8,373,050
St. Lucie Cnty Sch Brd COP
FSA Ser 05
5.00%, 7/01/29 6,730 7,035,744
Tallahassee Hosp Rev
(Tallahassee Memorial) Ser 00
6.375%, 12/01/30 2,750 2,932,600
Tampa Higher Ed
(Tampa University Proj) RADIAN Ser 02
5.625%, 4/01/32 3,175 3,433,382
Village Ctr Cmnty Dev Dist
5.125%, 10/01/28 1,000 1,060,200
Volusia Cnty Ed Fac Auth
(Embry Riddle Aero Univ) Ser 99A
5.75%, 10/15/29 2,000 2,090,300
Waterlefe Cmnty Dev Dist
Ser 01
6.95%, 5/01/31 710 758,742
-------------
186,620,353
-------------
California-1.3%
California State GO
5.00%, 2/01/32 2,850 2,950,520
-------------
Connecticut-2.6%
Connecticut State GO
MBIA Ser 04
6.937%, 12/01/11(b)(c) 5,000 5,823,900
-------------
Illinois-0.4%
Manhattan
(No 04-1-Brookstone Springs Proj) Ser 05
5.875%, 3/01/28 775 764,452
-------------
_______________________________________________________________________________
40 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Kansas-0.2%
Wyandotte Cnty Unified Govt Spl Oblig Rev
(Sales Tax Second Lien) Ser 05B
5.00%, 12/01/20 $ 500 $ 512,755
-------------
Minnesota-0.2%
St. Paul Hsg & Redev Auth Hosp Rev
(Healtheast Proj) Ser 05
6.00%, 11/15/25 500 542,580
-------------
New Jersey-1.3%
Garden St Preservation Trust
(Open Space & Farmland)
FSA Ser 05 A
5.80%, 11/01/16 2,400 2,782,680
-------------
Ohio-1.4%
Cleveland Cuyahoga Port Auth
Ser 01
7.35%, 12/01/31 3,000 3,169,080
-------------
Total Long-Term Municipal Bonds
(cost $192,940,906) 203,166,320
-------------
Short-Term Municipal Notes(d)-6.8%
Alaska-2.2%
Valdez Marine Term Rev
(BP Pipelines, Inc. Proj)
Ser 03B
2.83%, 7/01/37 1,900 1,900,000
Ser 03C
2.83%, 7/01/37 3,000 3,000,000
-------------
4,900,000
-------------
Florida-0.2%
Dade Cnty IDA Exempt Facs Rev
(Florida Pwr & Lt Co)
2.84%, 6/01/21 500 500,000
-------------
Minnesota-1.9%
Maple Grove Minn Economic Dev Rev
(Heritage Christian Academy)
2.75%, 7/01/29 4,185 4,185,000
-------------
Nevada-1.1%
Clark Cnty Sch Dist GO
FSA Ser 01A
2.80%, 6/15/21 2,500 2,500,000
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 41
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
New Mexico-0.7%
Hurley PCR
(Kennecott Santa Fe) Ser 85
2.83%, 12/01/15 $ 1,500 $ 1,500,000
-------------
New York-0.7%
New York City Municipal Wtr Fin Auth Swr
Sys Rev
FGIC Ser 95A
2.80%, 6/15/25 1,400 1,400,000
-------------
Total Short-Term Municipal Notes
(cost $14,985,000) 14,985,000
-------------
Total Investments-98.5%
(cost $207,925,906) 218,151,320
Other assets less liabilities-1.5% 3,335,813
-------------
Net Assets-100% $ 221,487,133
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- -------------------- ------------ ------------- -------------- --------------- ----------------
Citigroup, Inc. $2,200 6/22/07 BMA* 2.962% $ (11,817)
76.48% of
Goldman Sachs & Co. 12,900 2/03/06 1 Month LIBOR+ BMA* (11,197)
JPMorgan Chase & Co. 2,000 4/05/07 BMA* 2.988% (5,489)
Merrill Lynch 3,100 10/04/05 MMD++ 3.758% 8,044
Merrill Lynch 1,025 10/04/05 MMD++ 3.745% 1,558
85.10% of
Merrill Lynch 12,900 2/03/06 BMA* 1 Month LIBOR+ 29,444
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
++ MMD (Municipal Market Data)
CREDIT DEFAULT SWAP CONTRACT (see Note D)
Notional
Swap Counterparty & Amount Interest Termination Unrealized
Referenced Obligation (000) Rate Date Appreciation
- ---------------------- ------------- -------------- --------------- ----------------
Buy Contract:
Merrill Lynch
Commonwealth of Puerto Rico
5.00%, 7/01/18 $500 0.15% 6/20/10 $1,440
_______________________________________________________________________________
42 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(a) Represents entire or partial position segregated as collateral for
interest rate swap.
(b) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At September 30, 2005, the aggregate market value of these securities
amounted to $11,435,500 or 5.2% of the net assets.
(d) Variable rate coupon, rate shown as of September 30, 2005.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
CIFG - CIFG Assurance North America, Inc.
COP - Certificate of Participation
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
IDA - Industrial Development Authority
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 43
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-103.4%
Long-Term Municipal Bonds-100.5%
Massachusetts-74.1%
Massachusetts Bay Trans Auth
Ser 04A
5.25%, 7/01/21 $ 2,000 $ 2,224,820
Massachusetts Bldg Auth
(Dedicated Sales Tax Rev) Ser 05A
5.00%, 8/15/24 3,000 3,184,530
Massachusetts Dev Fin Agy
(Massachusetts Biomedical) Ser 00C
6.25%, 8/01/20 3,000 3,302,700
(Worcester Redev) Asset Gty Ser 99
5.25%, 6/01/19 2,350 2,483,151
Massachusetts Ed Fac
(Massachusetts College of Pharmacy)
Ser 99B
6.75%, 7/01/30 3,350 3,841,244
(Suffolk Univ) Ser 99
5.85%, 7/01/29 1,375 1,512,019
Massachusetts Ed Fin Auth
(Educational Loan) MBIA Ser 00G AMT
6.00%, 12/01/16 1,215 1,249,615
Massachusetts Hlth & Ed Fac Auth
(Berkshire Healthcare) Asset Gty Ser 01E
5.70%, 10/01/25 4,000 4,374,840
(Cape Cod Healthcare) Asset Gty Ser 01C
5.25%, 11/15/31 2,600 2,735,668
(Covenant Medical Center) Ser 02
6.00%, 7/01/31 2,500 2,708,000
(New England Med Ctr) FGIC Ser 02H
5.00%, 5/15/25 2,000 2,089,100
(Partners Healthcare System) Ser 01C
5.75%, 7/01/32 4,000 4,363,720
(University of Mass Proj) MBIA Ser 02C
5.25%, 10/01/31(a) 6,440 6,877,985
(Winchester Hosp) Ser 00E
6.75%, 7/01/30 4,500 5,143,050
Massachusetts Hsg Fin Agy MFHR
(Harbor Point) AMBAC Ser 96A AMT
6.40%, 12/01/15 4,880 5,030,743
(Rental Mtg) AMT
AMBAC Ser 95E
6.00%, 7/01/41 4,125 4,403,066
AMBAC Ser 00A
6.00%, 7/01/37 2,680 2,740,648
MBIA Ser 00H
6.65%, 7/01/41 4,785 5,179,140
_______________________________________________________________________________
44 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Massachusetts Ind Fin Agy MFHR
(Heights Crossing) FHA Ser 95 AMT
6.15%, 2/01/35 $ 6,000 $ 6,176,940
Massachusetts Port Auth Spec Fac
(Bosfuel Corp) MBIA Ser 97 AMT
6.00%, 7/01/36 6,155 6,428,591
(US Air Proj) MBIA Ser 96A AMT
5.875%, 9/01/23 2,000 2,079,200
Massachusetts State Health & Edl Facs Auth Rev
(Lahey Clinic Medical Center) FGIC Series 05C
5.00%, 8/15/22 5,000 5,282,750
Massachusetts State Wtr Pollutn Abatement
(Pool Proj Bds) Ser 10
5.00%, 8/01/24 5,000 5,314,800
Massachusetts State Dev Fin Agy
(Pharmacy & Allied Health) Ser 05D
5.00%, 7/01/24 3,500 3,650,570
Massachusetts State GO
Ser 02
Pre Refunded
5.25%, 11/01/30 3,075 3,361,129
Un Refunded
5.25%, 11/01/30 1,925 2,104,121
Ser 04
7.13%, 8/01/16(b)(c) 2,500 2,914,700
Massachusetts State Spl Oblig Rev
(Cons Ln) Ser 05A
5.00%, 6/01/23 1,500 1,598,040
-------------
102,354,880
-------------
Arizona-6.6%
Goodyear IDA Water & Sewer Rev
(Litchfield Pk Svc Proj) Ser 01 AMT
6.75%, 10/01/31 5,160 5,536,990
Quailwood Meadows Cmnty Facs Dist
6.125%, 7/15/29 1,000 1,010,930
Stoneridge Cmnty Fac Dist
Ser 01
6.75%, 7/15/26 2,365 2,551,196
-------------
9,099,116
-------------
California-0.8%
California State GO
5.25%, 11/01/25 1,000 1,070,520
-------------
Florida-1.3%
Crossings at Fleming Island
Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 1,750 1,854,283
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 45
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Georgia-0.4%
Atlanta Tax Allocation
(Eastside Proj) Ser 05B
5.60%, 1/01/30 $ 500 $ 501,835
-------------
Illinois-0.3%
Plano Spl Svc Area No.3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 395 395,936
-------------
Kansas-0.4%
Wyandotte Cnty/Kansas City Unified Govt Spl
Oblig Rev
(Sales Tax-Second Lien-Area B)
5.00%, 12/01/20 500 512,755
-------------
Nevada-1.5%
Clark Cnty Impt Dist No. 142
Ser 03
6.10%, 8/01/18 1,000 1,029,440
Henderson Local Impt Dist
Ser 03
5.80%, 3/01/23 990 1,022,650
-------------
2,052,090
-------------
New Jersey-5.0%
Garden State Preservation Trust
(Open Space & Farmland) Ser 05A
5.80%, 11/01/17-11/01/21 6,000 6,880,390
-------------
Puerto Rico-10.1%
Puerto Rico Comwlth Hwy & Trans Auth Rev
FGIC Ser 03
7.66%, 7/01/14(b)(c) 4,315 5,250,578
Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22 6,400 6,909,184
Puerto Rico Hsg Fin Auth
(Cap Fd Prog) HD LN
5.00%, 12/01/20 1,740 1,821,728
-------------
13,981,490
-------------
Total Long-Term Municipal Bonds
(cost $ 131,058,492) 138,703,295
-------------
Short-Term Municipal Notes(d)-2.9%
Alaska-0.4%
Valdez Alaska Marine Term Rev
Ser 03B
2.83%, 7/01/37 500 500,000
-------------
_______________________________________________________________________________
46 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Massachusetts-2.1%
Massachusetts State GO
(Central Artery) Ser 00A
2.83%, 12/01/30 $ 2,500 $ 2,500,000
Massachusetts Water Resources Auth
Ser 02D
2.80%, 8/01/17 500 500,000
-------------
3,000,000
-------------
New York-0.4%
New York GO
2.80%, 8/01/21 500 500,000
-------------
Total Short-Term Municipal Notes
(cost $4,000,000) 4,000,000
-------------
Total Municipal Bonds & Notes
(cost $135,058,492) 142,703,295
-------------
SHORT-TERM INVESTMENT-0.3%
Time Deposit-0.3%
The Bank of New York
2.75%, 10/03/05
(cost $369,000) 369 369,000
-------------
Total Investments-103.7%
(cost $135,427,492) 143,072,295
Other assets less liabilities-(3.7%) (5,044,974)
-------------
Net Assets-100% $ 138,027,321
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- -------------------- ------------ ------------- -------------- --------------- ----------------
Citigroup, Inc. $1,400 6/22/07 BMA* 2.962% $ (7,520)
76.48% of
Goldman Sachs & Co. 8,000 2/03/06 1 Month LIBOR+ BMA* (6,944)
JPMorgan Chase & Co. 1,200 4/05/07 BMA* 2.988% (3,293)
Merrill Lynch 1,000 10/05/05 MMD++ 3.735% 652
Merrill Lynch 3,500 12/01/05 BMA* 2.22% (3,841)
85.10% of
Merrill Lynch 8,000 2/03/06 BMA* 1 Month LIBOR+ 18,259
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
++ MMD (Municipal Market Data)
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 47
(a) Represents entire or partial position segregated as collateral for
interest rate swap.
(b) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At September 30, 2005, the aggregate market value of these securities
amounted to $8,165,278 or 5.9% of net assets.
(d) Variable rate coupon, rate shown as of September 30, 2005.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FHA - Federal Housing Authority
GO - General Obligation
IDA - Industrial Development Authority
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
XLCA - XL Capital Assurance, Inc.
See notes to financial statements.
_______________________________________________________________________________
48 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.5%
Long-Term Municipal Bonds-96.1%
Michigan-76.3%
Allen Park Pub Sch Dist
Ser 03
9.74%, 5/01/18(a)(b) $ 4,745 $ 5,814,142
Cedar Springs Pub Sch Dist
Ser 03
5.00%, 5/01/28 1,835 1,909,996
Charles Stewart Mott Cmnty College
(Cmnty College Facs) MBIA
5.00%, 5/01/21 1,675 1,783,758
Detroit GO
Ser 04A-1
5.25%, 4/01/22 6,930 7,491,329
Detroit School Board
(School Board Loan Fund) FSA Ser 01A
5.125%, 5/01/31 2,900 3,169,120
Detroit Tax Increment
(Diamler/Chrysler Assembly Plant)
Ser 98A
5.50%, 5/01/21 1,640 1,550,407
Detroit Water Supply System
FGIC Ser 01B
5.50%, 7/01/33 3,550 3,852,496
Genesee County GO
(Water Supply System) AMBAC Ser 04
5.00%, 11/01/26 3,000 3,165,510
Kalamazoo Hosp Fin Auth
(Borgess Med Ctr) FGIC Ser 94A
7.71%, 6/01/11(a) 2,360 2,426,599
Kent Hosp Fin Auth Rev
(Metropolitan Hospital Proj) Ser 05A
5.75%, 7/01/25 210 224,011
Lansing Water & Elec System
FSA Ser 03A
5.00%, 7/01/25 2,200 2,309,186
Michigan Higher Ed Fac
(Hope College) Ser 02A
5.90%, 4/01/32 3,465 3,719,227
Michigan Higher Ed Student Loan Auth
AMBAC Ser 17G AMT
5.20%, 9/01/20 3,500 3,707,795
Michigan Hosp Fin Auth
(Crittenton Hospital) Ser 02A
5.625%, 3/01/27 1,250 1,323,950
(Trinity Health) Ser 00A
6.00%, 12/01/27 1,485 1,634,881
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 49
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Michigan Hosp Fin Auth Rev
(Chelsea Community Hospital Obli)
5.00%, 5/15/25 $ 415 $ 415,291
Michigan Hsg Dev Auth MFHR
(Arbor Pointe) GNMA Ser 99
5.40%, 6/20/40 1,810 1,849,024
(Danbury Manor) FNMA Ser 02A AMT
5.30%, 6/01/35(a) 2,495 2,565,883
(Oakbrook Villa Proj) GNMA Ser 00A AMT
6.50%, 1/20/42 2,970 3,179,355
(Rental Rev) AMBAC Ser 97A AMT
6.10%, 10/01/33(c) 5,400 5,693,165
(Rental Rev) Ser 02A AMT
5.50%, 10/20/43 1,950 2,014,331
Michigan Hsg Dev Auth SFMR
(Mortgage Rev) MBIA Ser 02B AMT
5.50%, 6/01/30 235 240,231
Michigan Municipal Bond Auth Rev
(Clean Water St Revolving Fd)
5.00%, 10/01/24 5,960 6,345,730
(Sch Dist City Of Detroit) FSA
5.00%, 6/01/20 2,000 2,120,920
Michigan St Hosp Fin Auth Rev
(Marquette Gen Hosp Oblig Grp A)
5.00%, 5/15/26 785 793,918
Michigan State
(Trunk Line Fund) FSA
Ser 01A
5.25%, 11/01/30 4,000 4,359,280
Michigan Strategic Fund
(Detroit Edison) XLCA Ser 02C AMT
5.45%, 12/15/32 3,000 3,186,540
Michigan Strategic Fund Hlth Fac
(Autumn Wood) GNMA Ser 02A
5.20%, 12/20/22 3,000 3,171,870
(Holland Home) Ser 98
5.75%, 11/15/18-11/15/28 2,000 2,043,500
Midland Cnty PCR
(CMS Energy) Ser 00A AMT
6.875%, 7/23/09 2,000 2,090,480
North Muskegon Sch Dist
Ser 03
5.25%, 5/01/28 1,500 1,603,215
Olivet School Board Fund
Ser 02
5.125%, 5/01/28 1,065 1,118,719
Ovid Elsie Schools Board Fund
Ser 02
5.00%, 5/01/25 2,650 2,770,231
_______________________________________________________________________________
50 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Pontiac Tax Increment Fin Auth
(Dev Area #3) Ser 02
6.25%, 6/01/22 $ 2,780 $ 2,906,963
6.375%, 6/01/31 3,250 3,402,848
Romulus Tax Increment Fin Auth
Ser 94
6.75%, 11/01/19 1,585 1,648,242
Royal Oak Hosp Fin Auth
(William Beaumont Hosp) MBIA Ser 01M
5.25%, 11/15/35 3,200 3,316,448
Saginaw Hosp Fin Auth
(Convenant Medical Ctr) Ser 00F
6.50%, 7/01/30 1,770 1,948,859
Southfield Michigan Libr Bldg Auth MBIA
5.00%, 5/01/25 3,340 3,511,075
-------------
106,378,525
-------------
California-1.7%
California Health Fac Fin Auth
(Sutter Heath) Ser 00A
6.25%, 8/15/35 1,100 1,240,217
California State GO
5.25%, 11/01/25 1,000 1,070,520
-------------
2,310,737
-------------
Florida-5.7%
Capital Trust Agy Rev
(Cargo Acq Grp) Ser 03 AMT
5.75%, 1/01/32 1,500 1,496,100
Collier Cnty Cmnty Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 1,490 1,551,612
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 1,835 1,944,348
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 985 1,063,958
Gateway Cmnty Dev Dist
(Sun City) Ser 03B
5.50%, 5/01/10 635 644,950
Northern Palm Beach Asses Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32 800 826,920
Waterlefe Cmnty Dev Dist
Ser 01B
6.25%, 5/01/10 415 420,183
-------------
7,948,071
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 51
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Illinois-1.0%
Antioch Village Spl Svc Area
(Clublands Proj) Ser 03
6.625%, 3/01/33 $ 500 $506,390
(Deercrest Proj) Ser 03
6.625%, 3/01/33 500 506,390
Plano Spl Svc Area No.3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 395 395,936
-------------
1,408,716
-------------
Puerto Rico-11.4%
Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22 5,000 5,397,799
Puerto Rico Hsg Fin Corp SFMR
(Mortgage Rev) AMT
Ser 01B GNMA
5.50%, 12/01/23 2,080 2,126,426
(Mortgage Rev) Ser 01C AMT
5.30%, 12/01/28 1,825 1,850,660
Puerto Rico Ind Fin Auth Hlth Fac
(Ascension Health) Ser 00A
6.125%, 11/15/30 3,000 3,357,720
Puerto Rico Pub Fin Corp
MBIA Ser 01A
5.00%, 8/01/31 2,875 3,127,080
-------------
15,859,685
-------------
Total Long-Term Municipal Bonds
(cost $127,715,946) 133,905,734
-------------
Short-Term Municipal Notes(d)-2.4%
Alaska-0.3%
Valdez Alaska Marine Term Rev
(BP Pipelines Proj) Ser 03B
2.83%, 7/01/37 500 500,000
-------------
Michigan-0.3%
University Mich Univ Revs
(Med Svc Plan) Ser 98A-1
2.82%, 12/01/21 365 365,000
-------------
New Mexico-1.8%
Hurley PCR
(Updates-Kennecott Santa Fe)
2.83%, 12/01/15 2,500 2,500,000
-------------
Total Short-Term Municipal Notes
(cost $3,365,000) 3,365,000
-------------
Total Municipal Bonds & Notes
(cost $131,080,946) 137,270,734
-------------
_______________________________________________________________________________
52 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT-0.1%
Time Deposit-0.1%
The Bank of New York
2.75%, 10/03/05
(cost $140,000) $ 140 $ 140,000
-------------
Total Investments-98.6%
(cost $131,220,946) 137,410,734
Other assets less liabilities-1.4% 1,965,459
-------------
Net Assets-100% $ 139,376,193
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- -------------------- ------------ ------------- -------------- --------------- ----------------
Citigroup, Inc. $ 1,400 6/22/07 BMA* 2.962% $ (7,520)
76.48% of
Goldman Sachs & Co. 8,000 2/03/06 1 Month LIBOR+ BMA* (6,944)
JPMorgan Chase & Co. 1,300 4/05/07 BMA* 2.988% (3,568)
85.10% of
Merrill Lynch 8,000 2/03/06 BMA* 1 Month LIBOR+ 18,260
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
CREDIT DEFAULT SWAP CONTRACT (see Note D)
Notional
Swap Counterparty & Amount Interest Termination Unrealized
Referenced Obligation (000) Rate Date Appreciation
- ----------------------- ------------- -------------- --------------- ----------------
Buy Contract:
Merrill Lynch
Commonwealth of Puerto Rico
5.00%, 7/01/18 $600 0.15% 6/20/10 $1,728
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 53
(a) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
September 30, 2005, the aggregate market value of this security amounted to
$5,814,142 or 4.2% of the net assets.
(c) Represents entire or partial position segregated as collateral for
interest rate swap.
(d) Variable rate coupon, rate shown as of September 30, 2005.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
SFMR - Single Family Mortgage Revenue
XLCA - XL Capital Assurance, Inc.
See notes to financial statements.
_______________________________________________________________________________
54 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.4%
Long-Term Municipal Bonds-97.1%
Minnesota-97.1%
Bemidji Hlth Fac
(North Country Hlth Svcs) RADIAN Ser 02
5.00%, 9/01/31 $ 1,500 $ 1,539,555
Brooklyn Park MFHR
(Brooks Landing) FNMA Ser 99A AMT
5.50%, 7/01/19 1,355 1,408,170
Cass Lake Sch Dist FGIC
5.00%, 2/01/26 1,760 1,847,859
Chaska Elec Rev
(Generating Facs) Ser 05A
5.25%, 10/01/25 1,000 1,073,120
Dakota Cnty MFHR
(Grande Market Place Proj)
GNMA Ser 02A AMT
5.40%, 11/20/43 4,750 4,850,984
Elk River Indpt Sch Dist
FSA Ser 03
7.17%, 2/01/15(a)(b) 3,065 3,535,110
Farmington Indpt Sch Dist 192
FSA Ser 05B
5.00%, 2/01/24 3,875 4,108,818
Golden Valley Hlth Fac
(Convenant Retirement Cmnty) Ser 99A
5.50%, 12/01/29 1,000 1,035,560
Little Canada MFHR
(Cedars Lakeside Apts) GNMA Ser 97A
5.95%, 2/01/32 2,650 2,739,544
Minneapolis & St. Paul Arpt Rev
FGIC Ser 00B AMT
6.00%, 1/01/21 3,455 3,762,219
MBIA Ser 03A
5.00%, 1/01/28 1,500 1,563,675
Minneapolis Common Bond Fund
Ser 97-2 AMT
6.20%, 6/01/17 1,485 1,540,598
Ser 01G-3
5.45%, 12/01/31 1,500 1,575,780
Minneapolis Health Care Sys Rev
(Fairview Hlth Svcs) Ser 05D
5.00%, 11/15/30 1,000 1,050,170
Minneapolis Hosp Rev
(Allina Hlth Sys) Ser 02A
5.75%, 11/15/32 1,500 1,611,060
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 55
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Minneapolis MFHR
(Bottineau Commons Proj) GNMA Ser 02 AMT
5.45%, 4/20/43 $ 2,000 $ 2,051,880
(Sumner Field) GNMA Ser 02 AMT
5.60%, 11/20/43 2,505 2,574,363
Minneapolis Pkg Assmt GO
MBIA Ser 02
5.25%, 12/01/26 2,000 2,173,580
Minnesota Agric & Eco Dev
(Small Business Loan Proj) AMT
Ser 96A
6.75%, 8/01/16 1,450 1,501,011
Ser 00C
7.25%, 8/01/20 1,000 1,070,910
Ser 00D
7.25%, 8/01/20 1,000 1,070,910
Minnesota Agric & Eco Dev Hlth Fac
(Benedictine Hlth Sys) MBIA Ser 99
5.13%, 2/15/29(c) 4,000 4,144,679
(Evangelical Lutheran Proj) Ser 02
6.00%, 2/01/22-2/01/27 2,880 3,139,449
Minnesota Agric & Economic Dev Brd Rev
(Prerefunded-Hlth Care Sys) Ser 00A
6.375%, 11/15/29 1,700 1,953,130
Minnesota Higher Ed Fac Auth
(College Art & Design) Ser 00-5D
6.75%, 5/01/26 1,000 1,088,990
(Hamline Univ) Ser 99-5B
6.00%, 10/01/29 1,250 1,321,963
(St Catherine College)
5.375%, 10/01/32 1,000 1,044,650
(Univ St Thomas) Ser 04-5
5.00%, 10/01/24 1,000 1,043,390
5.25%, 10/01/34 1,000 1,056,460
Minnesota Hsg Fin Agy
Ser 04A AMT
12.45%, 1/01/07(a)(b) 280 297,088
Ser 04B AMT
12.31%, 1/01/07(a)(b) 415 437,701
Ser 04C AMT
11.73%, 1/01/10(a)(b) 750 814,913
Minnesota Municipal Pwr Agy Elec
Ser 04A
5.25%, 10/01/24 500 536,645
Minnesota Municipal Pwr Agy Elec Rev
5.25%, 10/01/21 3,000 3,257,370
Minnetonka MFHR
(Archer Heights Apts Proj)
GNMA Ser 99A AMT
5.30%, 1/20/27 1,620 1,666,413
_______________________________________________________________________________
56 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Prior Lake Indpt Sch Dist No. 719
(School Bldg) Ser 05B FSA
5.00%, 2/01/23 $ 3,350 $ 3,549,459
Sartell Poll Ctl Rev
(International Paper) Ser 03A
5.20%, 6/01/27 1,000 1,015,070
Scott Cnty MFHR
(Northridge Apts Proj) MBIA Ser 03
5.00%, 2/01/34 1,000 1,019,580
Seaway Port Auth Duluth
Indl Dev Dock & Wharf
(Cargill Inc. Proj) Ser 04
4.20%, 5/01/13 2,150 2,151,333
Shakopee Health Care Facs TBD
(St Francis Regl Med Ctr) Ser 04
5.10%, 9/01/25 600 619,038
Shoreview MFHR
(Lexington Shores Proj)
GNMA Ser 01A AMT
5.55%, 8/20/42 1,445 1,479,131
St. Cloud Hosp Rev
(Saint Cloud Hosp) FSA Ser 00A
5.875%, 5/01/30 3,750 4,126,762
St. Paul Hsg & Redev Auth Hosp Rev
(Healtheast Proj)
6.00%, 11/15/25 500 542,580
St. Paul MFHR
(Burlington Apt-8) GNMA
5.35%, 5/01/31 1,550 1,554,263
St. Paul Pkg Auth Rev
(Block 19 Ramp) FSA Ser 02A
5.35%, 8/01/29 3,075 3,295,016
St. Paul Port Auth Lease Rev
(Cedar St. Office Building) Ser 03
5.00%, 12/01/23 1,000 1,048,370
Ser 02
5.25%, 12/01/27 1,725 1,829,276
Waconia Hlth Care Fac Rev
(Ridgeview Med Ctr) RADIAN Ser 99A
6.125%, 1/01/29 3,415 3,734,098
Western Pwr Agy
MBIA Ser 03A
5.00%, 1/01/26-1/01/30 3,100 3,234,659
White Bear Lake MFHR
(Renova Partners Proj)
FNMA Ser 01 AMT
5.60%, 10/01/30 1,000 1,033,330
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 57
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Willmar Hosp Rev
(Rice Mem Hosp Proj) FSA Ser 02
5.00%, 2/01/32 $ 2,000 $ 2,078,100
-------------
Total Long-Term Municipal Bonds
(cost $93,248,377) 97,797,782
-------------
Short-Term Municipal Notes(d)-1.3%
Minnesota-1.3%
Dakota Cnty Cmnty Dev Agy MFHR
(Regatta Commons Proj) Ser 03A AMT
2.90%, 1/01/38 1,000 1,000,000
Waconia Indl Dev Rev
(Milltronics Mfg. Co. Proj) Ser 95
2.84%, 10/01/16 345 345,000
-------------
Total Short-Term Municipal Notes
(cost $1,345,000) 1,345,000
-------------
Total Municipal Bonds & Notes
(cost $94,593,377) 99,142,782
-------------
SHORT-TERM INVESTMENT-0.4%
Time Deposit-0.4%
The Bank of New York
2.75%, 10/03/05
(cost $377,000) 377 377,000
-------------
Total Investments-98.8%
(cost $94,970,377) 99,519,782
Other assets less liabilities-1.2% 1,231,568
-------------
Net Assets-100% $ 100,751,350
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- -------------------- ------------ ------------- -------------- --------------- ----------------
Citigroup, Inc. $ 1,000 6/22/07 BMA* 2.962% $ (5,371)
76.48% of
Goldman Sachs & Co. 5,600 2/03/06 1 Month LIBOR+ BMA* (4,861)
JPMorgan Chase & Co. 900 4/05/07 BMA* 2.988% (2,470)
85.10% of
Merrill Lynch 5,600 2/03/06 BMA* 1 Month LIBOR+ 12,782
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
_______________________________________________________________________________
58 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(a) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At September 30, 2005, the aggregate market value of these securities
amounted to $5,084,812 or 5.0% of the net assets.
(c) Represents entire or partial position segregated as collateral for
interest rate swap.
(d) Variable rate coupon, rate shown as of September 30, 2005
Glossary of Terms:
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
RADIAN - Radian Group, Inc.
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 59
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-99.4%
Long-Term Municipal Bonds-99.4%
New Jersey-91.4%
Bergen Cnty Impt Auth Sch Dist Rev
(Wyckoff Twp Brd Ed Proj) Ser 05
5.00%, 4/01/25 $ 1,555 $ 1,664,099
Hoboken Parking Auth
AMBAC Ser 01A
5.30%, 5/01/27 3,700 4,127,387
Lafayette Yard Com Dev Corp
(Conv Ctr Hotel Proj) MBIA Ser 00
5.80%, 4/01/35 2,100 2,341,080
Middlesex Cnty MFHR
FNMA Ser 01 AMT
5.25%, 7/01/21 750 799,185
Morris-Union Jointure Commn Ctsf Partn
RADIAN Ser 04
5.00%, 5/01/24 2,200 2,288,198
New Jersey Eco Dev Auth
FGIC Ser 04
7.109%, 6/15/13(a)(b) 3,000 3,480,300
(American Water Co) FGIC AMT
6.875%, 11/01/34 5,000 5,065,850
(Anheuser-Busch) Ser 95 AMT
5.85%, 12/01/30 5,000 5,122,900
(Hackensack Water Co)
MBIA Ser 94B AMT
5.90%, 3/01/24(c) 4,000 4,055,400
(Kapkowski Rd) Ser 98B
6.50%, 4/01/28 7,500 8,728,574
(Kapkowski Rd) Ser 98B AMT
6.50%, 4/01/31 2,085 2,377,567
(Liberty State Park Proj)
Ser A
5.00%, 3/01/24 1,500 1,584,195
Ser C
5.00%, 3/01/27 2,000 2,108,880
(Masonic Charity Foundation Proj)
Ser 01
5.50%, 6/01/31 1,000 1,081,120
Ser 02
5.25%, 6/01/24 540 579,274
(NUI Corp) ACA Ser 98A AMT
5.25%, 11/01/33 3,700 3,750,764
(Pub Ser Elec & Gas) MBIA Ser 94A AMT
6.40%, 5/01/32 5,000 5,064,150
(School Facs Construction)
5.25%, 3/01/25 3,300 3,516,612
_______________________________________________________________________________
60 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
New Jersey Eco Dev Auth School Fac
Ser 04I
5.25%, 9/01/24 $ 2,510 $ 2,786,702
AMBAC Ser 03
11.278%, 6/15/21(a)(b) 2,250 2,999,070
New Jersey Health Care Fac
(Atlantic City Med Ctr) Ser 02
5.75%, 7/01/25 1,875 1,995,225
(Bayshore Cmnty Hosp) RADIAN Ser 02
5.125%, 7/01/32 9,250 9,586,237
(Capital Health System) Ser 03
5.00%, 7/01/26 1,250 1,261,888
(Good Shepherd) RADIAN Ser 01A
5.20%, 7/01/31 1,350 1,407,632
(Kennedy Health System) Ser 01
5.625%, 7/01/31 2,700 2,863,134
(Newton Memorial Hosp) FSA Ser 01
5.00%, 7/01/26 1,500 1,562,655
(Palisades Med Ctr) ACA Ser 99
5.25%, 7/01/28 1,000 1,012,030
(Southern Ocean County Hosp)
RADIAN Ser 01
5.125%, 7/01/31 4,500 4,670,505
(Wood Johnson) Ser 00
5.75%, 7/01/31 3,350 3,609,558
New Jersey Health Care Facs Fing Auth Rev
(RWJ Health Care Corp.) RADIAN Ser 05B
5.00%, 7/01/25 960 998,218
(St. Clare's Hospital, Inc.) RADIAN Ser 04A
5.25%, 7/01/23 2,085 2,195,276
New Jersey Higher Ed
(Student Loan) MBIA Ser 00A AMT
6.15%, 6/01/19 1,045 1,068,429
New Jersey Hsg & Mtg Fin Agy MFHR
(Pooled Loan) AMBAC Ser 96A AMT
6.25%, 5/01/28 5,000 5,136,400
(Rental Hsg) FSA AMT
Ser 00A1
6.35%, 11/01/31 2,000 2,111,120
New Jersey St Ed Facs Auth
(Higher Ed Cap Impt) Ser 02A
5.125%, 9/01/22 2,500 2,660,400
(Princeton Univ) Ser 05A
5.00%, 7/01/23 3,480 3,732,091
(Ramapo College of New Jersey)
AMBAC Ser 01D
5.00%, 7/01/31 1,000 1,035,200
FGIC Ser 04E
5.00%, 7/01/23-07/01/28 3,250 3,449,633
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 61
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
New Jersey State Trans Auth
(Transportation System) Ser 03C
5.50%, 6/15/24 $ 3,750 $ 4,214,213
Newark Hsg Auth
(Newark Marine Terminal) MBIA Ser 04
5.25%, 1/01/21-1/01/22(d) 3,580 3,892,983
North Hudson Sew Auth
MBIA Ser 01A
Zero Coupon, 8/01/24 12,340 5,137,635
Port Auth NY & NJ
(121st) MBIA Ser 00
5.375%, 10/15/35 5,000 5,236,549
(126th) FGIC Ser 02
5.25%, 5/15/37 2,500 2,639,375
(JFK Int'l Airport Proj) MBIA Ser 97-6 AMT
5.75%, 12/01/22 7,675 8,172,569
Salem Cnty PCR
(PSE&G Power) Ser 01A AMT
5.75%, 4/01/31 1,500 1,600,905
Salem Cnty Waste Disp Rev
(E.I. Dupont) Ser 92A AMT
6.125%, 7/15/22 3,500 3,518,480
South Jersey Port Corp
(Marine Terminal) AMT
5.20%, 1/01/23 1,000 1,047,800
South Jersey Transportation Auth
(Raytheon Aircraft Service) Ser 97A AMT
6.15%, 1/01/22 335 340,849
Union Cnty Impt Auth
MBIA Ser 03A
5.25%, 8/15/23 2,885 3,130,110
Vineland Sewer Rev
(Landis Sewerage) FGIC Ser 93C
8.42%, 9/19/19(b) 3,250 4,042,675
-------------
156,851,081
-------------
California-0.6%
California State GO
5.25%, 11/01/25 1,000 1,070,520
-------------
Florida-3.2%
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,500 2,648,975
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,000 1,080,160
Hammock Bay Cmnty Dev Dist
(Special Assessment) Ser 04A
6.15%, 5/01/24 500 503,750
_______________________________________________________________________________
62 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Northern Palm Beach Asses Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32 $ 1,270 $ 1,312,736
-------------
5,545,621
-------------
Illinois-0.9%
Antioch Village Spcl Svc Area
(Clublands Proj) Ser 03
6.625%, 3/01/33 1,000 1,012,780
Plano Spl Svc Area No.3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 550 551,304
-------------
1,564,084
-------------
Nevada-1.2%
Henderson Local Impt Dist
Ser 03
5.80%, 3/01/23 960 991,661
North Las Vegas Cmnty Fac Dist
(#60 Aliante)
6.40%, 12/01/22 990 1,025,026
-------------
2,016,687
-------------
Ohio-0.3%
Port Auth Columbiana Cnty Solid Waste
Fac Rev
(Apex Environmental LLC) Ser 04A AMT
7.125%, 8/01/25 500 504,315
-------------
Pennsylvania-1.0%
Delaware Riv Jt Toll Bridge Rev
(PA/NJ Bridge) Ser 03
5.00%, 7/01/28 1,625 1,683,939
-------------
Virginia-0.8%
Broad Street Cmnty Dev Dist
(Parking Fac) Ser 03
7.50%, 6/01/33 1,200 1,320,540
-------------
Total Municipal Bonds
(cost $160,169,080) 170,556,787
-------------
SHORT-TERM INVESTMENT-1.6%
Time Deposit-1.6%
The Bank of New York
2.75%, 10/03/05
(cost $2,673,000) 2,673 2,673,000
-------------
Total Investments-101.0%
(cost $162,842,080) 173,229,787
Other assets less liabilities-(1.0%) (1,674,694)
-------------
Net Assets-100% $ 171,555,093
=============
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 63
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original September 30, Unrealized
Type Contracts Position Month Value 2005 Appreciation
- -------------------- ----------- ------------ ----------- ------------ -------------- ----------------
U.S. Treasury Note December
10 Yr Futures 92 Short 2005 $10,203,749 $10,112,813 $ 90,936
U.S. Treasury Note December
10 Yr Swap Futures 20 Short 2005 2,215,550 2,187,500 28,050
--------
$118,986
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- -------------------- ------------ ------------- -------------- --------------- ----------------
Citigroup, Inc. $ 1,800 6/22/07 BMA* 2.962% $ (9,669)
76.48% of
Goldman Sachs & Co. 11,700 2/03/06 1 Month LIBOR+ BMA* (10,155)
JPMorgan Chase & Co. 1,700 4/05/07 BMA* 2.988% (4,666)
85.10% of
Merrill Lynch 11,700 2/03/06 BMA* 1 Month LIBOR+ 26,705
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1993. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At September 30, 2005, the aggregate market value of these securities
amounted to $6,479,370 or 3.8% of net assets.
(b) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(c) Position, or portion thereof with an aggregate market value of $400,471
has been segregated to collateralize margin requirement for open futures
contracts.
(d) Represents entire or partial position segregated as collateral for
interest rate swap.
Glossary of Terms:
ACA - American Capital Access
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
RADIAN - Radian Group, Inc.
See notes to financial statements.
_______________________________________________________________________________
64 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-99.0%
Long-Term Municipal Bonds-97.9%
Ohio-88.6%
Akron GO
MBIA Ser 02
5.00%, 12/01/23 $ 1,000 $ 1,050,840
Akron Stadium Rev
(Canal Park) Ser 96
6.90%, 12/01/16 5,000 5,322,749
Brookville Sch Dist GO
FSA Ser 03
5.00%, 12/01/26 2,000 2,099,540
Canton City Sch Dist
MBIA Ser 04B
5.00%, 12/01/22-12/01/23 2,150 2,274,389
Central Ohio Solid Waste Auth
AMBAC Ser 04B
5.00%, 12/01/21 2,035 2,165,525
Cincinnati Tech & Cmnty College
AMBAC 02
5.00%, 10/01/28 5,000 5,224,200
Cleveland Cuyahoga Port Auth
Ser 01
7.35%, 12/01/31 2,000 2,112,720
(Rita Proj) RADIAN Ser 04
5.00%, 11/15/19 1,850 1,943,832
Cleveland GO
Ser 02 MBIA
5.25%, 12/01/27 4,380 4,644,771
Ser 04 AMBAC
5.25%, 12/01/24 1,200 1,295,832
Columbus Sch Dist
FGIC Ser 03
5.00%, 12/01/24-12/01/25 4,730 4,967,669
Cuyahoga Cnty Hosp Rev
(UHHS) Ser 00
7.50%, 1/01/30 1,900 2,127,544
Cuyahoga Cnty MFHR
(Livingston Park Apts) GNMA Ser 02A
5.45%, 9/20/39 1,500 1,537,335
(Longwood Proj) GNMA Ser 01 AMT
5.60%, 1/20/43 3,620 3,741,922
(West Tech Apts Proj) GNMA Ser 02A AMT
5.450%, 3/20/44 1,075 1,101,209
Dayton Ohio Arpt Rev
(James M Cox Dayton Intl) RADIAN Ser 03A
5.00%, 12/01/23 1,280 1,321,446
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 65
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Dayton Sch Dist
(Administrative Fac Proj) Ser 03
6.00%, 12/01/19-12/01/21 $ 3,040 $ 3,394,370
Delaware Sch Dist
MBIA Ser 04
5.00%, 12/01/19 1,340 1,439,683
Dublin Sch Dist GO
FSA Ser 03
5.00%, 12/01/22 1,500 1,589,505
Erie Cnty Hosp Rev
(Firelands Med Ctr) Ser 02A
5.625%, 8/15/32 1,500 1,593,255
Fairfield Cnty Ohio Hosp Facs Rev
(Fairfield Med Ctr Proj) RADIAN Ser 03
5.00%, 6/15/24 1,000 1,027,980
Fairview Park Ohio
MBIA Ser 05
5.00%, 12/01/25 4,000 4,221,480
Franklin Cnty
(Online Computer Library Ctr) Ser 98A
5.20%, 10/01/20 2,800 2,933,980
Franklin Cnty MFHR
(Agler Green) GNMA Ser 02A AMT
5.65%, 5/20/32 770 803,025
5.80%, 5/20/44 1,150 1,196,575
(Wellington Village Proj)
GNMA Ser 01A AMT
5.40%, 2/20/43 3,845 3,904,252
Greater Cleveland Regl Tran Auth
MBIA Ser 04
5.00%, 12/01/24 1,350 1,430,258
Hamilton Cnty Health Fac
(Twin Towers) Ser 99A
5.80%, 10/01/23 1,775 1,816,109
Hamilton Cnty Convention Facs Auth Rev
FGIC Ser 04
5.00%, 12/01/23(a) 1,330 1,409,441
Hamilton Cnty Sales Tax
AMBAC Ser 00B
5.25%, 12/01/32(b) 13,185 13,972,935
Hamilton City Sch Dist MBIA
5.00%, 12/01/24 1,000 1,058,020
Hilliard Sch Dist
(Sch Constr) MBIA
5.00%, 12/01/26 1,850 1,960,242
Lucas Cnty Health Fac
(Altenheim Proj) GNMA Ser 99
5.50%, 7/20/40 3,200 3,381,504
Madeira City Sch Dist GO
MBIA Ser 04
5.00%, 12/01/22-12/01/23 2,665 2,835,829
_______________________________________________________________________________
66 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Oak Hills Ohio Loc Sch Dist
FSA Ser 05
5.00%, 12/01/25 $ 1,000 $ 1,057,900
Ohio Air Quality Dev Auth PCR
(Toledo Edison Co) Ser 97A AMT
6.10%, 8/01/27 5,000 5,195,500
Ohio Capital Corp MFHR
(Rental Hsg) MBIA Ser 95E Pre Re
6.35%, 1/01/22 755 773,173
Ohio Hsg Fin Agy MFHR
(Park Trails Apt) AMBAC Ser 01A AMT
5.50%, 12/01/34 1,670 1,718,747
Ohio Hsg Fin Agy SFMR
(Mortgage Rev) GNMA AMT
Ser 02
5.375%, 9/01/33 2,140 2,168,483
Ser 02-A2
5.60%, 9/01/34 575 587,679
Ser 02-A3
5.50%, 9/01/34 1,580 1,623,640
Ohio Sewer & Solid Waste Disp Facs
(Anheuser-Busch) Ser 01 AMT
5.50%, 11/01/35 3,000 3,138,300
Ohio St Bldg Auth
(Adult Correctl Proj) MBIA Ser 04A
5.00%, 4/01/22 2,975 3,158,736
(St Facs-Admin Bldg Fd Proj) Ser 05A
5.00%, 4/01/24 1,500 1,589,490
Ohio State GO
Ser 04A
5.00%, 6/15/22 3,000 3,197,880
Ohio State Higher Ed Fac Cmnty
(Denison University Proj) Ser 04
5.00%, 11/01/21- 11/01/24 3,440 3,657,857
Ohio State School Dist
FGIC Ser 03A
7.119%, 3/15/15(c)(d) 6,300 7,314,551
Ohio State University
MBIA Ser 04
5.00%, 12/01/22 1,950 2,072,304
Ohio Wtr Dev Auth
(Anheuser-Busch) Ser 99 AMT
6.00%, 8/01/38(c) 2,250 2,358,293
(North Star BHP Steel) Ser 95 AMT
6.45%, 9/01/20 3,425 3,493,500
Ohio Wtr Dev Auth PCR
(Cleveland Electric) Ser 97A AMT
6.10%, 8/01/20 2,000 2,110,540
Pinnacle Comnty Fin Auth
Series A
6.00%, 12/01/22 2,155 2,251,199
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 67
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Port Auth Columbiana Cnty Ohio Solid Waste
Fac Rev
(Apex Environmental LLC) Ser 04A AMT
7.125%, 8/01/25 $ 500 $ 504,315
Princeton Sch Dist
MBIA Ser 03
5.00%, 12/01/24 1,600 1,686,400
Riversouth Auth Rev
(Area Redevelopment)
Series 04A
5.25%, 12/01/21-12/01/22 2,000 2,180,520
Ser 05A
5.00%, 12/01/24 3,590 3,770,685
Steubenville Hosp Rev
(Trinity Hlth) Ser 00
6.50%, 10/01/30 2,500 2,761,100
Teays Valley Local Sch Dist MBIA
5.00%, 12/01/27 3,040 3,200,664
Toledo School Dist
FGIC Ser 03B
5.00%, 12/01/23 2,940 3,107,080
Toledo-Lucas Cnty Port Auth
(Cargill, Inc. Proj) Ser 04B
4.50%, 12/01/15 2,500 2,563,450
(Crocker Park Proj) Ser 03
5.375%, 12/01/35 5,000 5,332,149
Toledo-Lucas Cnty Port Fac
(CSX Transportation) Ser 92
6.45%, 12/15/21 1,270 1,475,740
-------------
166,949,841
-------------
California-1.7%
California State GO
5.20%, 4/01/26 1,000 1,057,610
5.25%, 4/01/29 2,000 2,114,980
-------------
3,172,590
-------------
Florida-3.9%
Collier Cnty Cmnty Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 1,460 1,520,371
Collier Cnty IDR
(Southern States Utils) Ser 96 AMT
6.50%, 10/01/25 1,500 1,554,435
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,000 2,119,180
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 965 1,042,354
_______________________________________________________________________________
68 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Hammock Bay Cmnty Dev Dist-Fla Spl
Assmt Rev
Ser 04A
6.15%, 5/01/24 $ 500 $ 503,750
Manatee Cnty Cmnty Dev Dist
(Heritage Harbor South) Ser 02B
5.40%, 11/01/08 670 670,911
-------------
7,411,001
-------------
Georgia-0.2%
Atlanta Tax Allocation
(Eastside Proj) Ser 05B
5.60%, 1/01/30 500 501,835
-------------
Illinois-0.8%
Antioch Village Spl Svc Area
(Deercrest Proj) Ser 03
6.625%, 3/01/33 1,000 1,012,780
Plano Spl Svc Area No.3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 565 566,339
-------------
1,579,119
-------------
Kansas-0.3%
Wyandotte Cnty/Kansas City Unified Govt Spl
Oblig Rev
(Sales Tax-second lien)
5.00%, 12/01/20 500 512,755
-------------
Puerto Rico-2.4%
Puerto Rico Tobacco Settlement Rev
(Childrens Trust Fund) Ser 00
6.00%, 7/01/26 4,000 4,464,400
-------------
Total Long-Term Municipal Bonds
(cost $176,684,521) 184,591,541
-------------
Short-Term Municipal Notes(e)-1.1%
Alaska-1.1%
Valdez Alaska Marine Term Rev
Ser 03B
2.83%, 7/01/37
(cost $2,000,000) 2,000 2,000,000
-------------
Total Investments-99.0%
(cost $178,684,521) 186,591,541
Other assets less liabilities-1.0% 1,878,131
-------------
Net Assets-100% $ 188,469,672
=============
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 69
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original September 30, Unrealized
Type Contracts Position Month Value 2005 Appreciation
- -------------------- ----------- ------------ ----------- ------------ -------------- ----------------
U.S. Treasury Note December
10 Yr Futures 34 Short 2005 $3,770,951 $3,737,344 $33,607
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- -------------------- ------------ ------------- -------------- --------------- ----------------
Citigroup, Inc. $ 2,000 6/22/07 BMA* 2.962% $ (10,743)
76.48% of
Goldman Sachs & Co. 11,100 2/03/06 1 Month LIBOR+ BMA* (9,635)
JPMorgan Chase & Co. 1,800 4/05/07 BMA* 2.988% (4,940)
Merrill Lynch 4,300 10/04/05 MMD++ 3.758% 11,158
Merrill Lynch 1,025 10/04/05 MMD++ 3.745% 1,558
85.10% of
Merrill Lynch 11,100 2/03/06 BMA* 1 Month LIBOR+ 25,335
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
++ MMD (Municipal Market Data)
CREDIT DEFAULT SWAP CONTRACT (see Note D)
Notional
Swap Counterparty & Amount Interest Termination Unrealized
Referenced Obligation (000) Rate Date Appreciation
- ---------------------------- ------------- -------------- --------------- ----------------
Buy Contract:
Merrill Lynch
Commonwealth of Puerto Rico
5.00%, 7/01/18 $900 0.15% 6/20/10 $ 2,592
_______________________________________________________________________________
70 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(a) Position, or portion thereof with an aggregate market value of $206,647
has been segregated to collateralize margin requirements for open futures
contracts.
(b) Represents entire or partial position segregated as collateral for
interest rate swap.
(c) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(d) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
September 30, 2005, the aggregate market value of this security amounted to
$7,314,551 or 3.9% of the net assets.
(e) Variable rate coupon, rate shown as of September 30, 2005.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 71
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-99.1%
Long-Term Municipal Bonds-95.7%
Pennsylvania-79.7%
Allegheny Cnty Arpt Rev
MBIA Ser 97 AMT
5.75%, 1/01/10 $ 2,540 $ 2,727,960
Allegheny Cnty GO
FGIC Ser 05C-57
5.00%, 11/01/23 6,390 6,762,281
Allegheny Cnty Higher Ed
(Thiel College) ACA Ser 99A
5.375%, 11/15/19-11/15/29 2,500 2,565,230
Allegheny Cnty Hlth Fac
(South Hills Hlth) Ser 00B
6.75%, 5/01/25 1,555 1,651,239
Allegheny Cnty Hlth Rev
(Residential Resources) Ser 01
6.60%, 9/01/31 1,595 1,682,629
Allegheny Cnty PCR
(USX Corp.) Ser 98
5.50%, 12/01/29 2,680 2,798,831
Allegheny Cnty Redev Auth Rev
(Pittsburgh Mills Proj)
5.60%, 7/01/23(a) 1,500 1,575,300
Allegheny Cnty San Auth Swr Rev
MBIA Ser 05A
5.00%, 12/01/24 7,490 7,911,013
Butler Cnty
FGIC Ser 03
5.25%, 7/15/26 1,625 1,800,744
Chester Upland Sch Dist
4.30%, 5/15/14 1,705 1,719,134
Crawford Cnty Hlth Fac
(Wesbury Methodist) Ser 99
6.25%, 8/15/29 1,600 1,632,800
Delaware Cnty Higher Ed
(Eastern College) Ser 99
5.625%, 10/01/28 2,500 2,536,925
Ephrata Area Sch Dist FGIC
5.00%, 3/01/22 1,000 1,060,000
Harrisburg Arpt Auth
(Susquehanna Arpt Proj) Ser 99 AMT
5.50%, 1/01/24 3,490 3,219,839
Lancaster Swr Auth Rev
MBIA Ser 04
5.00%, 4/01/22 1,330 1,408,231
Lehigh Northampton Airport Rev
MBIA Ser 00 AMT
6.00%, 5/15/30 4,400 4,780,512
_______________________________________________________________________________
72 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Lycoming Cnty Higher Ed
(College of Technology) AMBAC Ser 02
5.25%, 5/01/32 $ 2,250 $ 2,356,740
McKean Cnty Hosp Auth Rev
(Bradford Hosp Proj) ACA
5.25%, 10/01/30 1,000 1,028,970
Montgomery Cnty Higher Ed
(Beaver College) RADIAN Ser 99
5.70%, 4/01/27 6,000 6,277,320
Montgomery Cnty Hospital Rev
(Abington Memorial Hosp) Ser 02A
5.125%, 6/01/32 3,000 3,090,720
Montgomery Cnty Indl Dev Auth Rev
(Whitemarsh Continuing Care)
6.00%, 2/01/21 415 436,016
Pennsylvania Eco Dev Auth
(30th St Station) ACA Ser 02 AMT
5.875%, 6/01/33 3,485 3,699,362
(Amtrak) Ser 01A AMT
6.375%, 11/01/41 5,000 5,378,600
Pennsylvania Higher Ed
(Dickinson College) RADIAN Ser 03AA-1
5.00%, 11/01/26 1,000 1,028,720
(UPMC Health Sys) Ser 01A
6.00%, 1/15/31 2,405 2,641,532
Pennsylvania Higher Edl Facs Auth Rev
(Univ Health Sys) AMBAC Ser 05A
5.00%, 8/15/20 2,000 2,133,000
Pennsylvania Hsg Fin Agy SFMR
Ser 99-67A
5.90%, 10/01/30(b) 12,040 12,337,989
(Mortgage Rev) AMT
Ser 02-74B
5.25%, 4/01/32 3,195 3,229,953
Philadephia Gas Wks Rev
AGC Ser 04A-1
5.25%, 9/01/19 1,015 1,084,132
Philadelphia Ind Dev Rev
FSA Ser 03
14.33%, 10/01/10(a)(c) 1,600 1,966,080
(Leadership Learning Partners) Ser 05A
5.25%, 7/01/24(a) 350 342,549
Philadelphia Redev Auth Rev
(Neighborhood Transformation) FGIC Ser 05C
5.00%, 4/15/28 3,160 3,303,717
Philadelphia Sch Dist Lease Rev
FSA Ser 03
5.25%, 6/01/26 5,000 5,340,400
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 73
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Pittsburgh Pub Pkg Auth Pkg Rev
FGIC Ser 05A
5.00%, 12/01/19-12/01/25 $ 3,435 $ 3,617,157
FGIC Ser 05B
5.00%, 12/01/23 3,900 4,115,943
Pittsburgh Urban Redev Auth SFMR
(Mortgage Rev) FHA AMT
Ser 97A
6.25%, 10/01/28 790 816,947
Potter Cnty Hosp Rev
(Charles Cole Memorial) RADIAN Ser 96
6.05%, 8/01/24 4,340 4,480,616
Southcentral Gen Auth Rev
(Hanover Hospital, Inc.)
5.00%, 12/01/25 1,570 1,628,153
(Wellspan Health)
5.25%, 5/15/31 795 854,824
(Pre-refunded Wellspan Health)
5.25%, 5/15/31 3,905 4,316,040
State Pub Sch Bldg Auth Sch Rev
(Colonial Northampton Inter Unit 20)
FGIC Ser 05
5.00%, 5/15/26 2,025 2,129,024
-------------
123,467,172
-------------
California-0.7%
California State GO
5.00%, 2/01/33 1,000 1,033,060
-------------
Florida-5.2%
Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 1,225 1,275,654
Collier Cnty IDR
(Southern States Utils) Ser 96 AMT
6.50%, 10/01/25 2,000 2,072,580
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,000 2,119,180
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,045 1,128,767
Hammock Bay Cmnty Dev Dist-Fla Spl
Assmt Rev
Ser 04A
6.15%, 5/01/24 440 443,300
Northern Palm Beach Asses Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32 960 992,304
-------------
8,031,785
-------------
_______________________________________________________________________________
74 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Guam-0.3%
Guam Intl Arpt Auth
MBIA Ser 03B
5.25%, 10/01/23 $ 500 $ 543,090
-------------
Illinois-1.6%
Antioch Village Spl Svc Area
(Deercrest Proj) Ser 03
6.625%, 3/01/33 1,000 1,012,780
Plano Spl Svc Area No.3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 465 466,102
Yorkville Cmnty Fac Dist
(Raintree Village Proj) Ser 03
6.875%, 3/01/33 1,000 1,043,900
-------------
2,522,782
-------------
New Jersey-1.6%
New Jersey Economic Dev Auth Rev
(Cigarette Tax) FGIC Ser 04
5.00%, 6/15/12 2,375 2,550,655
-------------
Puerto Rico-5.3%
Puerto Rico Comwlth
Hwy & Trans Auth Rev
FGIC Ser 03
7.66%, 7/01/14(a)(c) 3,265 3,972,917
FSA Ser 02D
5.00%, 7/01/27 4,000 4,183,480
-------------
8,156,397
-------------
Virgin Islands-1.3%
Virgin Islands Pub Fin Auth Rev
ACA Ser 03
5.00%, 10/01/31 1,250 1,285,538
Virgin Islands Pub Fin Auth Rev(a)(c)
FSA Ser 03A
13.19%, 10/01/13 85 124,755
FSA Ser 03B
13.19%, 10/01/14 50 75,060
FSA Ser 03C
14.45%, 10/01/15 70 111,176
FSA Ser 03D
14.45%, 10/01/16 180 278,672
FSA Ser 03E
14.45%, 10/01/17 115 174,501
-------------
2,049,702
-------------
Total Long-Term Municipal Bonds
(cost $141,401,796) 148,354,643
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 75
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Short-Term Municipal Note(d)-3.4%
Pennsylvania-3.4%
Pennsylvania Hsg Fin Agy SMFR
(Mortgage Rev) FSA Ser 03 AMT
3.27%, 6/01/08(c)
(cost $5,200,000) $ 5,200 $ 5,200,000
-------------
Total Municipal Bonds & Notes
(cost $146,601,796) 153,554,643
-------------
SHORT-TERM INVESTMENT-0.3%
Time Deposit-0.3%
The Bank of New York
2.75%, 10/03/05
(cost $440,000) 440 440,000
-------------
Total Investments-99.4%
(cost $147,041,796) 153,994,643
Other assets less liabilities-0.6% 941,915
-------------
Net Assets-100% $ 154,936,558
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- -------------------- ------------ ------------- -------------- --------------- ----------------
Citigroup, Inc. $1,600 6/22/07 BMA* 2.962% $ (8,594)
76.48% of
Goldman Sachs & Co. 9,900 2/03/06 1 Month LIBOR+ BMA* (8,593)
JPMorgan Chase & Co. 1,500 4/05/07 BMA* 2.988% (4,117)
Merrill Lynch 2,700 10/04/05 MMD++ 3.758% 7,006
Merrill Lynch 1,800 10/05/05 MMD++ 3.735% 1,173
85.10% of
Merrill Lynch 9,900 2/03/06 BMA* 1 Month LIBOR+ 22,597
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
++ MMD (Municipal Market Data)
_______________________________________________________________________________
76 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
CREDIT DEFAULT SWAP CONTRACT (see Note D)
Notional
Swap Counterparty & Amount Interest Termination Unrealized
Referenced Obligation (000) Rate Date Appreciation
- ----------------------------- ------------- -------------- --------------- ----------------
Buy Contract:
Merrill Lynch
Commonwealth of Puerto Rico
5.00%, 7/01/18 $ 700 0.15% 6/20/10 $ 2,016
(a) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(b) Represents entire or partial position segregated as collateral for
interest rate swap.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At September 30, 2005, the aggregate market value of these securities
amounted to $11,903,161 or 7.7% of net assets.
(d) Variable rate coupon, rate shown as of September 30, 2005 .
Glossary of Terms:
ACA - American Capital Access
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FHA - Federal Housing Authority
FSA - Financial Security Assurance, Inc.
GO - General Obligation
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance
PCR - Pollution Control Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 77
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-102.9%
Long-Term Municipal Bonds-97.4%
Virginia-85.1%
Albemarle Cnty Ed Fac
(The Convent School) Ser 01A
7.50%, 7/15/23 $ 500 $ 548,610
7.75%, 7/15/32 4,260 4,685,830
Alexandria MFHR
(Buckingham Village Apts) Ser 96A AMT
6.15%, 1/01/29 4,000 4,076,400
Arlington Cnty Hosp Rev
(Arlington Health Sys) Ser 01
5.25%, 7/01/31 5,900 6,148,625
Arlington Cnty IDR Sewer Rev
(Ogden Martin) FSA Ser 98B AMT
5.25%, 1/01/09 2,295 2,431,277
Arlington Cnty MFHR
(Arlington View Terrace)
FNMA Ser 01 AMT
5.15%, 11/01/31 1,550 1,601,615
Bell Creek Cmnty Dev Dist
Ser 03A
6.75%, 3/01/22 800 828,544
Broad Street Cmnty Dev Dist
(Parking Fac) Ser 03
7.50%, 6/01/33 1,500 1,650,675
Celebrate North Cmnty Dev Dist
Ser 03B
6.60%, 3/01/25 1,250 1,292,463
Chesterfield Cnty
(VA Elec & Pwr Co) Ser 02
5.875%, 6/01/17 3,800 4,192,806
Dinwiddie Cnty Indl Dev Auth
(Lease Rev) MBIA Ser 04B
5.00%, 2/15/24 3,200 3,364,928
Dulles Town Cmnty Dev Auth
(Dulles Town Ctr Proj) Ser 98
6.25%, 3/01/26 2,055 2,106,087
Fairfax Cnty Swr Rev
Ser 04A
7.01%, 7/15/13(a)(b) 1,580 1,861,967
Ser 04B
7.01%, 7/15/14(a)(b) 1,665 1,971,094
Ser 04C
7.01%, 7/15/15(a)(b) 1,760 2,061,629
Fairfax Water Auth Rev
Ser 02
5.00%, 4/01/32(c) 3,380 3,512,733
_______________________________________________________________________________
78 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Greater Richmond Hotel Tax Rev
(Convention Ctr Proj) Ser 00
6.25%, 6/15/32 $ 6,000 $ 6,820,619
Hampton Convention Ctr Rev
AMBAC Ser 02
5.00%, 1/15/35(d) 5,150 5,333,804
Harrisonburg MFHR
(Battery Heights Assoc) GNMA Ser 96A
6.25%, 4/20/36 5,185 5,323,958
(Greens of Salem Run) FSA Ser 97 AMT
6.30%, 4/01/29 1,055 1,096,673
Henry Cnty Hosp Rev
(Memorial Hosp Martinsville & Henry)
Ser 97
6.00%, 1/01/27 1,250 1,308,350
James City Cnty Solid Waste Rev
(Anheuser Busch Proj) Ser 97 AMT
6.00%, 4/01/32 4,200 4,341,330
Metropolitan Washington Arpt Rev
Ser 97B AMT
5.50%, 10/01/23 9,410 9,622,665
Newport News Hlth Care Fac
(Mennowood) GNMA Ser 96A
6.25%, 8/01/36 2,590 2,693,134
Newport News MFHR
(Walker Village Proj) GNMA Ser 02A AMT
5.55%, 9/20/34 1,880 1,942,322
5.65%, 3/20/44 1,660 1,709,933
Norfolk Arpt Auth Rev
FGIC Ser 01B AMT
5.30%, 7/01/25 10,000 10,435,899
(Air Cargo) Ser 02 AMT
6.25%, 1/01/30 1,000 1,026,060
Northwestern Regl Jail Auth Facs Rev MBIA
5.00%, 7/01/25 1,500 1,583,955
Pocahontas Pkwy Assoc Toll Rd Rev
Ser 98B
Zero Coupon, 8/15/15 750 443,100
Portsmouth Util Rev
FGIC Ser 01B
5.00%, 6/01/26 1,500 1,529,025
Prince William MFHR
(Woodwind Gables)
AMBAC Ser 01A AMT
5.30%, 12/01/34 2,860 2,946,000
Richmond FSA
Ser 05A
5.00%, 7/15/22 2,500 2,683,775
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 79
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Staunton Ed Fac
(Mary Baldwin College) Ser 96
6.75%, 11/01/21 $ 3,645 $ 3,817,336
Upper Occoquan Sew Auth Rev FSA
5.00%, 7/01/25 2,500 2,660,425
Virginia Beach Wtr & Swr Rev
5.00%, 10/01/30 2,000 2,104,400
Virginia Beach MFHR
(Beth Sholom Terrace) GNMA Ser 02
5.40%, 4/01/44 2,900 3,051,090
Virginia Biotechnology Auth
(Consolidated Laboratories Proj) Ser 01
5.00%, 9/01/21 4,170 4,405,230
Virginia Hsg Dev Auth MFHR
(Rental Hsg)
Ser 99 AMT
5.95%, 2/01/23 5,525 5,743,680
Ser 02B AMT
5.50%, 4/01/27 5,000 5,150,100
Virginia Hsg Dev Auth SFMR
(Mortgage Rev) Ser 01D AMT
5.40%, 6/01/24 3,155 3,245,990
Virginia Port Auth Rev
(Newport News) Ser 02 AMT
5.00%, 7/01/27 1,000 1,038,490
5.125%, 7/01/24 4,000 4,211,440
Virginia Sewer Rev
(Hopwell Wastewtr Fac) Ser 95A AMT
6.00%, 10/01/25 1,375 1,408,083
-------------
140,012,149
-------------
California-0.7%
California State GO
5.25%, 4/01/29 1,000 1,057,490
-------------
Florida-2.0%
Fleming Island Plantation Cmnty Dev Dist
Ser 00B
7.375%, 5/01/31 3,000 3,227,820
-------------
Georgia-0.3%
Atlanta Tax Allocation
(Eastside Project) Ser 05B
5.60%, 1/01/30 500 501,835
-------------
Illinois-0.9%
Plano Spl Svc Area No.3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 465 466,102
_______________________________________________________________________________
80 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Yorkville Cmnty Fac Dist
(Raintree Village Proj) Ser 03
6.875%, 3/01/33 $ 1,000 $ 1,043,900
-------------
1,510,002
-------------
New Jersey-3.2%
Garden State Preservation Trust
(Open Space & Farmland) Ser 05A
5.80%, 11/01/16 4,600 5,333,470
-------------
Puerto Rico-5.2%
Puerto Rico Comwlth Hwy & Tran Auth Rev
FGIC Ser 03
7.66%, 7/01/14(a)(b) 1,800 2,190,276
Puerto Rico Elec Pwr Auth
XLCA Ser 02-1
5.25%, 7/01/22 1,100 1,187,516
Puerto Rico HFA
(Capital Fund Program)
5.00%, 12/01/20 4,870 5,098,744
-------------
8,476,536
-------------
Total Long-Term Municipal Bonds
(cost $153,154,487) 160,119,302
-------------
Short-Term Municipal Notes(e)-5.5%
Mississippi-0.9%
Jackson Cnty Port Fac Rev
(Chevron USA, Inc. Proj)
2.80%, 6/01/23 1,500 1,500,000
-------------
Virginia-4.6%
Loudon Cnty Indl Dev Auth
(Howard Hughes Med)
Ser 03A
2.82%, 2/15/38 1,300 1,300,000
Ser 03C
2.95%, 2/15/38 500 500,000
Richmond Indl Dev Auth
(Church Schools)
2.81%, 5/01/35 5,800 5,800,000
-------------
7,600,000
-------------
Total Short-Term Municipal Notes
(cost $9,100,000) 9,100,000
-------------
Total Municipal Bonds & Notes
(cost $162,254,487) 169,219,302
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 81
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT-0.1%
Time Deposit-0.1%
The Bank of New York
2.75%, 10/03/05
(cost $233,000) $ 233 $ 233,000
-------------
Total Investments-103.0%
(cost $162,487,487) 169,452,302
Other assets less liabilities-(3.0%) (4,946,749)
-------------
Net Assets-100% $ 164,505,553
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original September 30, Unrealized
Type Contracts Position Month Value 2005 Depreciation
- -------------------- ----------- ------------ ----------- ------------ -------------- ----------------
U.S. Treasury Note December
10 Yr Futures 16 Long 2005 $1,774,750 $1,758,750 $(16,000)
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- -------------------- ------------ ------------- -------------- --------------- ----------------
Citigroup, Inc. $1,600 6/22/07 BMA* 2.962% $ (8,594)
76.48% of
Goldman Sachs & Co. 9,400 2/03/06 1 Month LIBOR+ BMA* (8,159)
JPMorgan Chase & Co. 1,500 4/05/07 BMA* 2.988% (4,117)
Merrill Lynch 1,025 10/04/05 MMD++ 3.745% 1,558
Merrill Lynch 2,000 10/05/05 MMD++ 3.735% 1,304
85.10% of
Merrill Lynch 9,400 2/03/06 BMA* 1 Month LIBOR+ 21,455
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
++ MMD (Municipal Market Data)
CREDIT DEFAULT SWAP CONTRACT (see Note D)
Notional
Swap Counterparty & Amount Interest Termination Unrealized
Referenced Obligation (000) Rate Date Appreciation
- ---------------------------- ------------- -------------- --------------- ----------------
Buy Contract:
Merrill Lynch
Commonwealth of Puerto Rico
5.00%, 7/01/18 $800 0.15% 6/20/10 $2,305
_______________________________________________________________________________
82 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(a) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At September 30, 2005, the aggregate market value of these securities
amounted to $8,084,966 or 4.9% of the net assets.
(c) Position, or position thereof with an aggregate market value of $62,356
has been segregated to collateralize margin requirements for open futures
contracts.
(d) Represents entire or partial position segregated as collateral for
interest rate swap.
(e) Variable rate coupon, rate shown as of September 30, 2005.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Finance Authority
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
SFMR - Single Family Mortgage Revenue
XLCA - XL Capital Assurance, Inc.
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 83
STATEMENT OF ASSETS & LIABILITIES
September 30, 2005
Arizona Florida
============== ==============
ASSETS
Investments in securities, at value
(cost: $190,093,992 and $207,925,906,
respectively) $ 197,568,303 $ 218,151,320
Cash 440 25,884
Unrealized appreciation of interest rate swap
contracts 25,335 39,046
Unrealized appreciation of credit default swap
contract -0- 1,440
Interest receivable 2,761,307 4,014,808
Receivable for shares of beneficial interest
sold 2,177,326 849,852
Variation margin on futures contracts 15,750 -0-
Receivable for investment securities sold -0- 9,331,837
-------------- --------------
Total assets 202,548,461 232,414,187
-------------- --------------
LIABILITIES
Unrealized depreciation of interest rate swap
contracts 24,780 28,503
Payable for investment securities purchased 1,474,402 9,251,592
Payable for shares of beneficial interest
redeemed 737,165 1,114,915
Dividends payable 202,458 247,478
Distribution fee payable 100,002 109,870
Advisory fee payable 28,049 46,494
Transfer agent fee payable 6,422 -0-
Administrative fee payable -0- 371
Accrued expenses and other liabilities 90,612 127,831
-------------- --------------
Total liabilities 2,663,890 10,927,054
-------------- --------------
Net Assets $ 199,884,571 $ 221,487,133
============== ==============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 180,854 $ 215,346
Additional paid-in capital 193,502,998 220,194,006
Distributions in excess of net investment
income (207,498) (254,651)
Accumulated net realized loss on investment
transactions (1,121,801) (8,904,965)
Net unrealized appreciation of investments 7,530,018 10,237,397
-------------- --------------
$ 199,884,571 $ 221,487,133
============== ==============
Class A Shares
Net assets $ 111,704,143 $ 127,541,127
-------------- --------------
Shares of beneficial interest outstanding 10,100,003 12,403,266
-------------- --------------
Class B Shares
Net assets $ 63,254,679 $ 53,995,584
-------------- --------------
Shares of beneficial interest outstanding 5,728,114 5,248,621
-------------- --------------
Class C Shares
Net assets $ 24,925,749 $ 39,950,422
-------------- --------------
Shares of beneficial interest outstanding 2,257,333 3,882,716
-------------- --------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $11.06 $10.28
Sales charge--4.25% of public offering price .49 .46
------ ------
Maximum offering price $11.55 $10.74
====== ======
Class B Shares
Net asset value and offering price per share $11.04 $10.29
====== ======
Class C Shares
Net asset value and offering price per share $11.04 $10.29
====== ======
See notes to financial statements.
_______________________________________________________________________________
84 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Massachusetts Michigan
============== ==============
ASSETS
Investments in securities, at value
(cost: $135,427,492 and $131,220,946,
respectively) $ 143,072,295 $ 137,410,734
Cash 45 365
Unrealized appreciation of interest rate swap
contracts 18,911 18,260
Unrealized appreciation of credit default swap
contract -0- 1,728
Interest receivable 2,038,673 2,436,879
Receivable for investment securities sold 1,806,369 -0-
Receivable for shares of beneficial interest
sold 556,836 173,449
-------------- --------------
Total assets 147,493,129 140,041,415
-------------- --------------
LIABILITIES
Unrealized depreciation of interest rate swap
contracts 21,598 18,032
Payable for investment securities purchased 8,496,524 -0-
Payable for shares of beneficial interest
redeemed 602,906 269,135
Dividends payable 141,497 144,367
Distribution fee payable 83,996 84,030
Advisory fee payable 28,599 51,791
Transfer agent fee payable 6,473 12,400
Accrued expenses and other liabilities 84,215 85,467
-------------- --------------
Total liabilities 9,465,808 665,222
-------------- --------------
Net Assets $ 138,027,321 $ 139,376,193
============== ==============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 126,107 $ 128,182
Additional paid-in capital 140,466,252 133,115,846
Distributions in excess of net investment
income (145,290) (149,734)
Accumulated net realized gain (loss) on
investment transactions (10,061,864) 90,155
Net unrealized appreciation of investments 7,642,116 6,191,744
-------------- --------------
$ 138,027,321 $ 139,376,193
============== ==============
Class A Shares
Net assets $ 53,034,830 $ 54,635,148
-------------- --------------
Shares of beneficial interest outstanding 4,840,056 5,019,513
-------------- --------------
Class B Shares
Net assets $ 50,203,240 $ 41,515,979
-------------- --------------
Shares of beneficial interest outstanding 4,590,130 3,821,173
-------------- --------------
Class C Shares
Net assets $ 34,789,251 $ 43,225,066
-------------- --------------
Shares of beneficial interest outstanding 3,180,509 3,977,515
-------------- --------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.96 $10.88
Sales charge--4.25% of public offering price .49 .48
------ ------
Maximum offering price $11.45 $11.36
====== ======
Class B Shares
Net asset value and offering price per share $10.94 $10.86
====== ======
Class C Shares
Net asset value and offering price per share $10.94 $10.87
====== ======
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 85
Minnesota New Jersey
============== ==============
ASSETS
Investments in securities, at value
(cost: $94,970,377 and $162,842,080,
respectively) $ 99,519,782 $ 173,229,787
Cash 529 411
Unrealized appreciation of interest rate swap
contracts 12,782 26,705
Interest receivable 1,500,200 2,745,429
Receivable for shares of beneficial interest
sold 316,501 1,285,292
Receivable for investment securities sold 25,054 -0-
Variation margin on futures contracts -0- 37,063
-------------- --------------
Total assets 101,374,848 177,324,687
-------------- --------------
LIABILITIES
Unrealized depreciation of interest rate swap
contracts 12,702 24,490
Payable for shares of beneficial interest
redeemed 351,183 1,740,711
Dividends payable 106,783 180,164
Distribution fee payable 43,425 98,421
Advisory fee payable 7,542 43,747
Transfer agent fee payable 5,179 10,288
Payable for investment securities purchased -0- 3,537,699
Accrued expenses and other liabilities 96,684 134,074
-------------- --------------
Total liabilities 623,498 5,769,594
-------------- --------------
Net Assets $ 100,751,350 $ 171,555,093
============== ==============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 98,836 $ 173,318
Additional paid-in capital 98,096,638 175,821,540
Distributions in excess of net investment
income (109,318) (185,196)
Accumulated net realized loss on investment
transactions (1,884,291) (14,763,477)
Net unrealized appreciation of investments 4,549,485 10,508,908
-------------- --------------
$ 100,751,350 $ 171,555,093
============== ==============
Class A Shares
Net assets $ 69,174,579 $ 77,570,090
-------------- --------------
Shares of beneficial interest outstanding 6,786,702 7,838,856
-------------- --------------
Class B Shares
Net assets $ 14,424,009 $ 58,705,614
-------------- --------------
Shares of beneficial interest outstanding 1,415,459 5,930,104
-------------- --------------
Class C Shares
Net assets $ 17,152,762 $ 35,279,389
-------------- --------------
Shares of beneficial interest outstanding 1,681,402 3,562,792
-------------- --------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.19 $ 9.90
Sales charge--4.25% of public offering price .45 .44
------ ------
Maximum offering price $10.64 $10.34
====== ======
Class B Shares
Net asset value and offering price per share $10.19 $ 9.90
====== ======
Class C Shares
Net asset value and offering price per share $10.20 $ 9.90
====== ======
See notes to financial statements.
_______________________________________________________________________________
86 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Pennsylvania
============== ==============
ASSETS
Investments in securities, at value
(cost: $178,684,521 and $147,041,796
respectively) $ 186,591,541 $ 153,994,643
Cash -0- 484
Unrealized appreciation of interest rate swap
contracts 38,051 30,776
Unrealized appreciation of credit default swap
contract 2,592 2,016
Receivable for investment securities sold 9,604,793 4,991,658
Interest receivable 2,827,956 2,892,056
Receivable for shares of beneficial interest
sold 819,818 706,252
Variation margin on futures contracts 11,156 -0-
-------------- --------------
Total assets 199,895,907 162,617,885
-------------- --------------
LIABILITIES
Due to custodian 62,857 -0-
Unrealized depreciation of interest rate swap
contracts 25,318 21,304
Payable for investment securities purchased 9,777,895 6,635,830
Payable for shares of beneficial interest
redeemed 1,112,368 607,579
Dividends payable 194,757 159,461
Distribution fee payable 107,510 83,340
Advisory fee payable 42,029 41,812
Transfer agent fee payable 593 11,514
Administrative fee payable 347 394
Accrued expenses and other liabilities 102,561 120,093
-------------- --------------
Total liabilities 11,426,235 7,681,327
-------------- --------------
Net Assets $ 188,469,672 $ 154,936,558
============== ==============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 186,021 $ 147,150
Additional paid-in capital 187,819,577 150,418,251
Distributions in excess of net investment
income (164,470) (157,228)
Accumulated net realized loss on investment
transactions (7,327,408) (2,435,950)
Net unrealized appreciation of investments 7,955,952 6,964,335
-------------- --------------
$ 188,469,672 $ 154,936,558
============== ==============
Class A Shares
Net assets $ 85,748,751 $ 78,471,507
-------------- --------------
Shares of beneficial interest outstanding 8,460,626 7,453,306
-------------- --------------
Class B Shares
Net assets $ 55,110,484 $ 41,760,249
-------------- --------------
Shares of beneficial interest outstanding 5,441,854 3,965,737
-------------- --------------
Class C Shares
Net assets $ 47,610,437 $ 34,704,802
-------------- --------------
Shares of beneficial interest outstanding 4,699,631 3,295,957
-------------- --------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.14 $10.53
Sales charge--4.25% of public offering price .45 .47
------ ------
Maximum offering price $10.59 $11.00
====== ======
Class B Shares
Net asset value and offering price per share $10.13 $10.53
====== ======
Class C Shares
Net asset value and offering price per share $10.13 $10.53
====== ======
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 87
Virginia
==============
ASSETS
Investments in securities, at value (cost $162,487,487) $ 169,452,302
Cash 264
Unrealized appreciation of interest rate swap contracts 24,317
Unrealized appreciation of credit default swap contract 2,305
Receivable for investment securities sold 5,206,175
Interest receivable 2,503,685
Receivable for shares of beneficial interest sold 1,088,060
--------------
Total assets 178,277,108
--------------
LIABILITIES
Unrealized depreciation of interest rate swap contracts 20,870
Payable for investment securities purchased 12,457,050
Payable for shares of beneficial interest redeemed 901,714
Dividends payable 191,350
Distribution fee payable 85,062
Advisory fee payable 23,285
Transfer agent fee payable 7,276
Variation margin on futures contracts 5,250
Accrued expenses and other liabilities 79,698
--------------
Total liabilities 13,771,555
--------------
Net Assets $ 164,505,553
==============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 152,232
Additional paid-in capital 160,168,112
Accumulated undistributed net investment income 115,304
Accumulated net realized loss on investment transactions (2,884,662)
Net unrealized appreciation of investments 6,954,567
--------------
$ 164,505,553
==============
Class A Shares
Net assets $ 88,605,128
--------------
Shares of beneficial interest outstanding 8,191,767
--------------
Class B Shares
Net assets $ 46,488,911
--------------
Shares of beneficial interest outstanding 4,305,300
--------------
Class C Shares
Net assets $ 29,411,514
--------------
Shares of beneficial interest outstanding 2,726,138
--------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.82
Sales charge--4.25% of public offering price .48
------
Maximum offering price $11.30
======
Class B Shares
Net asset value and offering price per share $10.80
======
Class C Shares
Net asset value and offering price per share $10.79
======
See notes to financial statements.
_______________________________________________________________________________
88 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
STATEMENT OF OPERATIONS
Year Ended September 30, 2005
Arizona Florida
============== ==============
INVESTMENT INCOME
Interest $ 9,583,370 $ 11,645,773
-------------- --------------
EXPENSES
Advisory fee 860,687 973,453
Distribution fee--Class A 293,524 326,001
Distribution fee--Class B 712,849 678,556
Distribution fee--Class C 221,377 398,003
Custodian 134,260 135,163
Transfer agency 81,373 98,128
Administrative 72,500 72,500
Audit 36,471 40,509
Printing 32,963 53,134
Legal 31,648 27,154
Registration 21,652 26,658
Trustees' fees 2,400 2,000
Miscellaneous 11,672 13,820
-------------- --------------
Total expenses 2,513,376 2,845,079
Less: expenses waived and reimbursed by
the Adviser (see Note B) (367,089) (403,718)
Less: expense offset arrangement
(see Note B) (470) (451)
-------------- --------------
Net expenses 2,145,817 2,440,910
-------------- --------------
Net investment income 7,437,553 9,204,863
-------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 1,591,075 1,377,981
Futures contracts 96,382 152,975
Swap contracts 29,878 (14,352)
Net change in unrealized
appreciation/depreciation of:
Investments 8,433 (838,789)
Futures contracts 55,152 (84,105)
Swap contracts (36,712) 33,881
-------------- --------------
Net gain on investment transactions 1,744,208 627,591
-------------- --------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 9,181,761 $ 9,832,454
============== ==============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 89
Massachusetts Michigan
============== ==============
INVESTMENT INCOME
Interest $ 7,016,823 $ 7,169,097
-------------- --------------
EXPENSES
Advisory fee 616,064 620,967
Distribution fee--Class A 132,008 146,287
Distribution fee--Class B 579,884 446,660
Distribution fee--Class C 349,121 445,645
Custodian 125,901 128,212
Transfer agency 73,799 95,527
Administrative 72,500 72,500
Audit 30,568 37,604
Printing 30,250 38,643
Legal 25,924 29,006
Registration 17,218 563
Trustees' fees 2,700 2,300
Miscellaneous 3,312 12,351
-------------- --------------
Total expenses 2,059,249 2,076,265
Less: expenses waived and reimbursed by
the Adviser (see Note B) (285,796) (72,500)
Less: expense offset arrangement
(see Note B) (543) (544)
-------------- --------------
Net expenses 1,772,910 2,003,221
-------------- --------------
Net investment income 5,243,913 5,165,876
-------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 1,083,305 1,618,153
Futures contracts 73,219 9,357
Swap contracts 30,251 (124,722)
Net change in unrealized
appreciation/depreciation of:
Investments (598,457) (285,748)
Futures contracts (121,885) 25,777
Swap contracts (36,372) (27,122)
-------------- --------------
Net gain on investment transactions 430,061 1,215,695
-------------- --------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 5,673,974 $ 6,381,571
============== ==============
See notes to financial statements.
_______________________________________________________________________________
90 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Minnesota New Jersey
============== ==============
INVESTMENT INCOME
Interest $ 4,996,843 $ 9,540,260
-------------- --------------
EXPENSES
Advisory fee 447,564 836,721
Distribution fee--Class A 201,177 228,565
Distribution fee--Class B 159,067 731,249
Distribution fee--Class C 164,930 366,247
Custodian 135,454 135,819
Administrative 72,500 72,500
Transfer agency 54,768 133,130
Legal 32,958 26,209
Printing 26,359 57,080
Audit 26,117 37,600
Registration 6,825 14,239
Trustees' fees 2,800 3,500
Miscellaneous 11,813 13,114
-------------- --------------
Total expenses 1,342,332 2,655,973
Less: expenses waived and reimbursed by
the Adviser (see Note B) (220,082) (269,445)
Less: expense offset arrangement
(see Note B) (325) (620)
-------------- --------------
Net expenses 1,121,925 2,385,908
-------------- --------------
Net investment income 3,874,918 7,154,352
-------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 255,373 1,192,772
Futures contracts (18,539) (132,177)
Swap contracts 15,747 74,713
Net change in unrealized
appreciation/depreciation of:
Investments 273,996 115,507
Futures contracts -0- 171,142
Swap contracts (19,085) (70,166)
-------------- --------------
Net gain on investment transactions 507,492 1,351,791
-------------- --------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 4,382,410 $ 8,506,143
============== ==============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 91
Ohio Pennsylvania
============== ==============
INVESTMENT INCOME
Interest $ 9,803,011 $ 8,242,191
-------------- --------------
EXPENSES
Advisory fee 874,235 721,562
Distribution fee--Class A 247,051 227,883
Distribution fee--Class B 638,558 492,135
Distribution fee--Class C 480,675 351,726
Custodian 135,943 129,607
Transfer agency 112,382 115,466
Administrative 72,500 72,500
Printing 51,801 47,979
Legal 39,832 28,916
Audit 37,263 36,114
Registration 6,018 12,588
Trustees' fees 3,000 2,700
Miscellaneous 6,682 5,790
-------------- --------------
Total expenses 2,705,940 2,244,966
Less: expenses waived and reimbursed by
the Adviser (see Note B) (270,498) (130,442)
Less: expense offset arrangement
(see Note B) (652) (524)
-------------- --------------
Net expenses 2,434,790 2,114,000
-------------- --------------
Net investment income 7,368,221 6,128,191
-------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain on:
Investment transactions 512,233 2,056,727
Futures contracts 45,416 85,189
Swap contracts 17,359 25,759
Net change in unrealized
appreciation/depreciation of:
Investments 229,601 (1,424,113)
Futures contracts (5,126) -0-
Swap contracts (22,744) (21,637)
-------------- --------------
Net gain on investment transactions 776,739 721,925
-------------- --------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 8,144,960 $ 6,850,116
============== ==============
See notes to financial statements.
_______________________________________________________________________________
92 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia
==============
INVESTMENT INCOME
Interest $ 8,434,560
--------------
EXPENSES
Advisory fee 727,531
Distribution fee--Class A 230,390
Distribution fee--Class B 569,854
Distribution fee--Class C 278,914
Custodian 129,252
Transfer agency 82,850
Administrative 72,500
Audit 36,365
Legal 29,023
Printing 27,210
Registration 6,959
Trustees' fees 2,200
Miscellaneous 5,078
--------------
Total expenses 2,198,126
Less: expenses waived and reimbursed by the Adviser
(see Note B) (439,524)
Less: expense offset arrangement (see Note B) (414)
--------------
Net expenses 1,758,188
--------------
Net investment income 6,676,372
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT
TRANSACTIONS
Net realized gain on:
Investment transactions 1,004,230
Futures contracts 81,363
Swap contracts 26,588
Net change in unrealized appreciation/depreciation of:
Investments (255,927)
Futures contracts (118,151)
Swap contracts (26,894)
--------------
Net gain on investment transactions 711,209
--------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,387,581
==============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 93
STATEMENT OF CHANGES IN NET ASSETS
Arizona
===============================
Year Ended Year Ended
September 30, September 30,
2005 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 7,437,553 $ 8,743,004
Net realized gain on
investment transactions 1,717,335 429,218
Net change in unrealized
appreciation/depreciation
of investments 26,873 2,392,535
-------------- --------------
Net increase in net assets
from operations 9,181,761 11,564,757
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (4,128,486) (4,498,712)
Class B (2,535,386) (3,339,827)
Class C (783,563) (889,719)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase (decrease) 12,193,038 (32,967,788)
-------------- --------------
Total increase (decrease) 13,927,364 (30,131,289)
NET ASSETS
Beginning of period 185,957,207 216,088,496
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(207,498) and $(235,786),
respectively) $ 199,884,571 $ 185,957,207
============== ==============
See notes to financial statements.
_______________________________________________________________________________
94 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Florida
===============================
Year Ended Year Ended
September 30, September 30,
2005 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 9,204,863 $ 10,547,656
Net realized gain on
investment transactions 1,516,604 738,776
Net change in unrealized
appreciation/depreciation
of investments (889,013) 730,912
-------------- --------------
Net increase in net assets
from operations 9,832,454 12,017,344
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (4,995,087) (5,007,559)
Class B (2,662,613) (3,858,129)
Class C (1,551,635) (1,765,473)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase (decrease) 898,587 (42,766,066)
-------------- --------------
Total increase (decrease) 1,521,706 (41,379,883)
NET ASSETS
Beginning of period 219,965,427 261,345,310
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(254,651) and $(327,003),
respectively) $ 221,487,133 $ 219,965,427
============== ==============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 95
Massachusetts
===============================
Year Ended Year Ended
September 30, September 30,
2005 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 5,243,913 $ 6,327,232
Net realized gain on
investment transactions 1,186,775 757,299
Net change in unrealized
appreciation/depreciation
of investments (756,714) 943,482
-------------- --------------
Net increase in net assets
from operations 5,673,974 8,028,013
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (1,900,538) (1,934,023)
Class B (2,117,577) (2,837,125)
Class C (1,271,360) (1,599,200)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net decrease (1,134,517) (29,743,076)
-------------- --------------
Total decrease (750,018) (28,085,411)
NET ASSETS
Beginning of period 138,777,339 166,862,750
-------------- --------------
End of period (including distributions in
excess of net investment income of
($145,290) and ($224,034),
respectively) $ 138,027,321 $ 138,777,339
============== ==============
See notes to financial statements.
_______________________________________________________________________________
96 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Michigan
===============================
Year Ended Year Ended
September 30, September 30,
2005 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 5,165,876 $ 5,969,577
Net realized gain (loss) on
investment transactions 1,502,788 (866,133)
Net change in unrealized
appreciation/depreciation
of investments (287,093) 2,125,890
-------------- --------------
Net increase in net assets
from operations 6,381,571 7,229,334
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (2,048,050) (2,100,652)
Class B (1,583,188) (2,082,085)
Class C (1,567,468) (1,882,103)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase (decrease) 1,844,200 (30,867,045)
-------------- --------------
Total increase (decrease) 3,027,065 (29,702,551)
NET ASSETS
Beginning of period 136,349,128 166,051,679
-------------- --------------
End of period (including distributions in
excess of net investment income of
($149,734) and ($247,917),
respectively) $ 139,376,193 $ 136,349,128
============== ==============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 97
Minnesota
===============================
Year Ended Year Ended
September 30, September 30,
2005 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 3,874,918 $ 4,296,944
Net realized gain (loss) on
investment transactions 252,581 (598,756)
Net change in unrealized
appreciation/depreciation
of investments 254,911 320,698
-------------- --------------
Net increase in net assets
from operations 4,382,410 4,018,886
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (2,767,647) (2,911,067)
Class B (544,815) (790,152)
Class C (564,193) (667,428)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase (decrease) 2,020,229 (12,559,742)
-------------- --------------
Total increase (decrease) 2,525,984 (12,909,503)
NET ASSETS
Beginning of period 98,225,366 111,134,869
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(109,318) and $(198,886),
respectively) $ 100,751,350 $ 98,225,366
============== ==============
See notes to financial statements.
_______________________________________________________________________________
98 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey
===============================
Year Ended Year Ended
September 30, September 30,
2005 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 7,154,352 $ 8,916,223
Net realized gain (loss) on
investment transactions 1,135,308 (695,568)
Net change in unrealized
appreciation/depreciation
of investments 216,483 1,384,341
-------------- --------------
Net increase in net assets
from operations 8,506,143 9,604,996
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (3,280,121) (3,553,756)
Class B (2,637,795) (3,818,735)
Class C (1,323,005) (1,625,521)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net decrease (27,635,191) (40,240,977)
-------------- --------------
Total decrease (26,369,969) (39,633,993)
NET ASSETS
Beginning of period 197,925,062 237,559,055
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(185,196) and $(363,950),
respectively) $ 171,555,093 $ 197,925,062
============== ==============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 99
Ohio
===============================
Year Ended Year Ended
September 30, September 30,
2005 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 7,368,221 $ 8,222,031
Net realized gain on
investment transactions 575,008 1,078,821
Net change in unrealized
appreciation/depreciation
of investments 201,731 (531,664)
-------------- --------------
Net increase in net assets
from operations 8,144,960 8,769,188
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (3,437,306) (3,475,838)
Class B (2,219,109) (2,917,779)
Class C (1,669,222) (1,912,131)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net decrease (8,887,469) (16,511,187)
-------------- --------------
Total decrease (8,068,146) (16,047,747)
NET ASSETS
Beginning of period 196,537,818 212,585,565
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(164,470) and $(237,836),
respectively) $ 188,469,672 $ 196,537,818
============== ==============
See notes to financial statements.
_______________________________________________________________________________
100 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Pennsylvania
===============================
Year Ended Year Ended
September 30, September 30,
2005 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 6,128,191 $ 7,537,811
Net realized gain on
investment transactions 2,167,675 3,344,671
Net change in unrealized
appreciation/depreciation
of investments (1,445,750) (2,869,672)
-------------- --------------
Net increase in net assets
from operations 6,850,116 8,012,810
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (3,168,680) (3,622,102)
Class B (1,703,571) (2,424,676)
Class C (1,220,485) (1,540,948)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net decrease (11,672,434) (29,952,854)
-------------- --------------
Total decrease (10,915,054) (29,527,770)
NET ASSETS
Beginning of period 165,851,612 195,379,382
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(157,228) and $(218,442),
respectively) $ 154,936,558 $ 165,851,612
============== ==============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 101
Virginia
===============================
Year Ended Year Ended
September 30, September 30,
2005 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 6,676,372 $ 7,504,459
Net realized gain on
investment transactions 1,112,181 998,876
Net change in unrealized
appreciation/depreciation
of investments (400,972) (967,575)
-------------- --------------
Net increase in net assets
from operations 7,387,581 7,535,760
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (3,470,089) (3,120,967)
Class B (2,174,673) (3,017,851)
Class C (1,075,706) (1,253,250)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase (decrease) 5,117,842 (29,022,339)
-------------- --------------
Total increase (decrease) 5,784,955 (28,878,647)
NET ASSETS
Beginning of period 158,720,598 187,599,245
-------------- --------------
End of period (including undistributed
net investment income of $115,304
and $132,089, respectively) $ 164,505,553 $ 158,720,598
============== ==============
See notes to financial statements.
_______________________________________________________________________________
102 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
NOTES TO FINANCIAL STATEMENTS
September 30, 2005
NOTE A
Significant Accounting Policies
AllianceBernstein Municipal Income Fund II (the "Fund"), which is a
Massachusetts Business Trust, is registered under the Investment Company Act of
1940, as a non-diversified open-end management investment company. The Fund
operates as a series company currently comprised of nine portfolios: Arizona
Portfolio, Florida Portfolio, Massachusetts Portfolio, Michigan Portfolio,
Minnesota Portfolio, New Jersey Portfolio, Ohio Portfolio, Pennsylvania
Portfolio and Virginia Portfolio (the "Portfolios"). Each series is considered
to be a separate entity for financial reporting and tax purposes. Each
portfolio offers Class A, Class B and Class C shares. Class A shares are sold
with a front-end sales charge of up to 4.25% for purchases not exceeding
$1,000,000. With respect to purchases of $1,000,000 or more, Class A shares
redeemed within one year of purchase may be subject to a contingent deferred
sales charge of 1%. Class B shares are currently sold with a contingent
deferred sales charge which declines from 3% to zero depending on the period of
time the shares are held. Class B shares will automatically convert to Class A
shares six years after the end of the calendar month of purchase. Class C
shares are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase. All three classes of shares have
identical voting, dividend, liquidation and other rights and the same terms and
conditions, except that each class bears different distribution expenses and
has exclusive voting rights with respect to its distribution plan. The
financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of the
significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 103
to the principal exchange on which the securities are traded; securities not
listed on an exchange but traded on The NASDAQ Stock Market, Inc. ("NASDAQ")
are valued in accordance with the NASDAQ Official Closing Price; listed put or
call options are valued at the last sale price. If there has been no sale on
that day, such securities will be valued at the closing bid prices on that day;
open futures contracts and options thereon are valued using the closing
settlement price or, in the absence of such a price; the most recent quoted bid
price. If there are no quotations available for the day of valuation, the last
available closing settlement price is used; securities traded in the
over-the-counter market, ("OTC") (but excluding securities traded on NASDAQ)
are valued at the mean of the current bid and asked prices as reported by the
National Quotation Bureau or other comparable sources; U.S. Government
securities and other debt instruments having 60 days or less remaining until
maturity are valued at amortized cost if their original maturity was 60 days or
less; or by amortizing their fair value as of the 61st day prior to maturity if
their original term to maturity exceeded 60 days; fixed-income securities,
including mortgage backed and asset backed securities, may be valued on the
basis of prices provided by a pricing service or at a price obtained from one
or more of the major broker/dealers. In cases where broker/dealer quotes are
obtained, Alliance Capital Management, L.P. (the "Adviser") may establish
procedures whereby changes in market yields or spreads are used to adjust, on a
daily basis, a recently obtained quoted price on a security; and OTC and other
derivatives are valued on the basis of a quoted bid price or spread from a
major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
2. Taxes
It is the policy of each Portfolio to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains to its
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
_______________________________________________________________________________
104 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
3. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. As described more fully in the
prospectus for the Portfolios, each Portfolio may buy and sell securities from
other affiliated funds in accordance with the requirements of Rule 17a-7 of the
Investment Company Act of 1940. Each Portfolio has adopted procedures to ensure
that all such transactions are done in accordance with the requirements of Rule
17a-7. The Portfolios amortize premium and accrete original issue discount and
market discount as adjustments to interest income.
The Portfolios follow an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Portfolios.
4. Income and Expenses
All income earned and expenses incurred by the Portfolios are borne on a
pro-rata basis by each settled class of shares, based on the proportionate
interest in the Portfolios represented by the net assets of such class, except
that the Portfolio's Class B and Class C shares bear higher distribution and
transfer agent fees than Class A shares.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
U.S. generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts based
on their federal tax basis treatment; temporary differences do not require such
reclassification.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of the investment advisory agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .45% of the first $2.5 billion, .40% of
the next $2.5 billion and .35% in excess of $5 billion, of the average daily
net assets of each Portfolio. Prior to September 7, 2004, the Fund paid the
Adviser an advisory fee at an annual rate of .625% of each Portfolio's average
daily net assets. Such fees are accrued daily and paid monthly. For the year
ended September 30, 2005, the Adviser has voluntarily agreed to waive a portion
of its advisory fees. The aggregate amounts of such fee waivers were as
follows: Arizona Portfolio, $367,089; Florida Portfolio, $403,718;
Massachusetts Portfolio, $285,796; Michigan Portfolio, $0; Minnesota Portfolio,
$147,582; New Jersey Portfolio,
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 105
$269,445; Ohio Portfolio, $270,498; Pennsylvania Portfolio, $130,442; and
Virginia Portfolio, $367,024.
Effective January 1, 2004 through September 6, 2004, in connection with the
Adviser's settlement with the New York Attorney General's office ("NYAG") the
Adviser began waiving a portion of its advisory fee so as to charge the Fund at
the reduced annual rate discussed above.For a more complete discussion of the
Adviser's settlement with the NYAG, please see "Legal Proceedings" below.
Effective June 16, 2004, the Adviser has voluntarily agreed to waive its fees
and bear certain expenses to the extent necessary to limit the total portfolio
operating expenses on an annual basis as follows:
Effective June 16, 2004
----------------------------------------------
Portfolios Class A Class B Class C
- -------------------------------------------------------------------------------
Arizona 0.78% 1.48% 1.48%
Florida 0.78% 1.48% 1.48%
Massachusetts 0.82% 1.52% 1.52%
Michigan 1.01% 1.71% 1.71%
Minnesota 0.90% 1.60% 1.60%
New Jersey 0.87% 1.57% 1.57%
Ohio 0.85% 1.55% 1.55%
Pennsylvania 0.95% 1.65% 1.65%
Virginia 0.72% 1.42% 1.42%
Pursuant to the advisory agreement, the Arizona, Florida, Massachusetts, New
Jersey, Ohio and Pennsylvania Portfolios each paid $72,500 to the Adviser
representing the cost of certain legal and accounting services provided to
these Portfolios by the Adviser for the year ended September 30, 2005.
Additionally, the Adviser voluntarily agreed to waive all such fees for the
Michigan, Minnesota and Virginia Portfolios in the aggregate amount of $72,500
for each of these Portfolios.
Each Portfolio compensates Alliance Global Investor Services, Inc., (AGIS), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement, for
providing personnel and facilities to perform transfer agency services for each
Portfolio. AGIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. For the
year ended September 30, 2005, such compensation retained by AGIS amounted to:
Arizona Portfolio, $35,339; Florida Portfolio, $35,969; Massachusetts
Portfolio, $37,112; Michigan Portfolio, $47,767; Minnesota Portfolio, $31,415;
New Jersey Portfolio, $61,832; Ohio Portfolio, $51,028; Pennsylvania Portfolio,
$54,671; and Virginia Portfolio, $37,609.
For the year ended September 30, 2005, each Portfolio's expenses were reduced
under an expense offset arrangement with AGIS, as follows: Arizona Portfolio,
by $470; Florida Portfolio, by $451; Massachusetts Portfolio, by $543;
_______________________________________________________________________________
106 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Michigan Portfolio, by $544; Minnesota Portfolio, by $325; New Jersey
Portfolio, by $620; Ohio Portfolio, by $652; Pennsylvania Portfolio, by $524;
and Virginia Portfolio, by $414.
AllianceBernstein Investment Research and Management, Inc., (the
"Distributor"), formerly Alliance Fund Distributors, Inc. a wholly-owned
subsidiary of the Adviser, serves as the distributor of the Fund's shares. The
Distributor has advised the Fund that it has retained front-end sales charges
from sales of Class A shares and received contingent deferred sales charges
imposed upon redemptions by shareholders of Class A, Class B and Class C shares
for each Portfolio for the year ended September 30, 2005 as follows:
Front End Contingent Deferred Sales Charges
Sales Charges -----------------------------------------
Portfolio Class A Class A Class B Class C
- -------------------------------------------------------------------------------
Arizona $38,075 $ 151 $37,149 $10,687
Florida 33,138 32 55,912 2,376
Massachusetts 9,833 -0- 28,627 2,907
Michigan 15,465 13,186 35,070 9,375
Minnesota 9,447 -0- 5,319 2,829
New Jersey 5,870 -0- 46,169 8,213
Ohio 18,079 107 68,858 5,038
Pennsylvania 8,837 -0- 18,872 2,247
Virginia 21,636 323 25,866 1,125
NOTE C
Distribution Services Agreement
Each Portfolio has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, each Portfolio pays distribution and servicing fees to the
Distributor at an annual rate of up to .30% of each Portfolio's average daily
net assets attributable to Class A shares and 1% of each Portfolio's average
daily net assets attributable to both Class B and Class C shares. Such fees are
accrued daily and paid monthly. The Agreement provides that the Distributor
will use such payments in their entirety for distribution assistance and
promotional activities. The Distributor has incurred expenses in excess of the
distribution costs reimbursed by each Portfolio as follows:
Portfolio Class B Class C
- ------------------------------------------------------------------------------
Arizona $ 4,249,236 $ 1,163,794
Florida 4,376,921 2,614,095
Massachusetts 3,910,688 2,623,071
Michigan 3,529,136 3,287,915
Minnesota 2,769,872 2,048,398
New Jersey 5,685,762 2,657,944
Ohio 4,876,279 2,872,269
Pennsylvania 3,871,076 2,513,938
Virginia 4,091,556 1,890,794
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 107
Such costs may be recovered from each Portfolio in future periods so long as
the Agreement is in effect. In accordance with the Agreement, there is no
provision for recovery of unreimbursed distribution costs incurred by the
Distributor beyond the current fiscal year for Class A shares. The Agreement
also provides that the Adviser may use its own resources to finance the
distribution of each Portfolio's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) for the year ended September 30, 2005 were as
follows:
Portfolio Purchases Sales
- -----------------------------------------------------------------------------
Arizona $ 54,987,776 $ 46,282,440
Florida 48,034,421 57,806,555
Massachusetts 40,307,806 34,500,482
Michigan 23,110,971 25,775,399
Minnesota 15,641,049 12,986,053
New Jersey 69,045,763 91,180,899
Ohio 42,361,631 50,458,924
Pennsylvania 53,802,994 62,222,760
Virginia 44,985,637 36,601,649
There were no purchases or sales of U.S. government and government agency
obligations during the period.
At September 30, 2005, the cost of investments for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation/depreciation of investments for each Portfolio were as follows
(excluding futures and swap contracts):
Gross Unrealized Gross Unrealized Net Unrealized
Portfolio Tax Cost Appreciation Depreciation Appreciation
- ------------------------------------------------------------------------------------------------------
Arizona $ 190,112,367 $ 7,857,893 $ 401,957 $ 7,455,936
Florida 208,071,401 10,370,760 290,841 10,079,919
Massachusetts 135,501,744 7,789,952 219,401 7,570,551
Michigan 131,247,113 6,248,671 85,050 6,163,621
Minnesota 94,996,854 4,564,973 42,045 4,522,928
New Jersey 162,943,784 10,483,163 197,160 10,286,003
Ohio 178,729,074 8,040,854 178,387 7,862,467
Pennsylvania 147,057,263 7,122,084 184,704 6,937,380
Virginia 162,794,650 7,286,971 629,319 6,657,652
1. Swap Agreements
The Portfolios may enter into swaps to hedge its exposure to interest rates and
credit risk or for investment purposes. A swap is an agreement that obligates
two parties to exchange a series of cash flows at specified intervals based
upon or calculated by reference to changes in specified prices or rates for a
specified amount
_______________________________________________________________________________
108 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
of an underlying asset. The payment flows are usually netted against each
other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Portfolios, and/or the termination value at the end of
the contract. Therefore, the Portfolios consider the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the underlying securities.
As of October 1, 2003, the Portfolios have adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. The Portfolios accrue for the interim
payments on swap contracts on a daily basis, with the net amount recorded
within unrealized appreciation/depreciation of swap contracts on the statement
of assets and liabilities. Once the interim payments are settled in cash, the
net amount is recorded as realized gain/loss on swaps, in addition to realized
gain/loss recorded upon the termination of swaps contracts on the statements of
operations. Prior to October 1, 2003, these interim payments were reflected
within interest income/expense in the statement of operations. Fluctuations in
the value of swap contracts are recorded as a component of net change in
unrealized appreciation/depreciation of investments.
The Portfolios may enter into credit default swaps. The Portfolios may purchase
credit protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
provides upon the occurrence of a credit event, as defined in the swap
agreement, for the Portfolio to buy/(sell) from/(to) the counterparty at the
notional amount (the "Notional Amount") and receive/(deliver) the principal
amount of the referenced obligation. If a credit event occurs, the maximum
payout amount for a Sale Contract is limited to the Notional Amount of the swap
contract ("Maximum Payout Amount"). During the term of the swap agreement, the
Portfolio receives/(pays) semi-annual fixed payments from/(to) the respective
counterparty, calculated at the agreed upon interest rate applied to the
Notional Amount. These interim payments are recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities.
Credit default swaps may involve greater risks than if a Portfolio had invested
in the referenced obligation directly. Credit default swaps are subject to
general market risk, liquidity risk, counterparty risk and credit risk. If the
Portfolio is a buyer and no credit event occurs, it will lose its investment.
In addition, if the Portfolio is a seller and a credit event occurs, the value
of the referenced obliga-
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 109
tion received by the Portfolio coupled with the periodic payments previously
received, may be less than the Maximum Payout Amount it pays to the buyer,
resulting in a loss to the Portfolio.
2. Financial Futures Contracts
The Portfolios may buy or sell financial futures contracts for the purpose of
hedging its portfolio against adverse affects of anticipated movements in the
market. The Portfolios bear the market risk that arises from changes in the
value of these financial instruments and the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
securities hedged or used to cover.
At the time the Portfolios enter into a futures contract, the Portfolios
deposit and maintain as collateral an initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Portfolios agree to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in the value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Portfolios as
unrealized gains or losses. Risk may arise from the potential inability of a
counterparty to meet the terms of a contract. When the contract is closed, the
Portfolios record a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the time it was closed.
NOTE E
Shares of Beneficial Interest
There is an unlimited number of $.01 par value shares of beneficial interest
authorized for Class A, Class B and Class C shares.
Transactions in shares of beneficial interest for each Portfolio were as
follows:
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Arizona Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 3,113,599 1,816,955 $ 34,510,747 $ 19,654,453
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 265,134 253,239 2,937,022 2,738,939
- -------------------------------------------------------------------------------
Shares converted
from Class B 581,305 242,630 6,441,636 2,628,449
- -------------------------------------------------------------------------------
Shares redeemed (1,959,807) (3,603,140) (21,672,509) (38,483,415)
- -------------------------------------------------------------------------------
Net increase
(decrease) 2,000,231 (1,290,316) $ 22,216,896 $(13,461,574)
===============================================================================
_______________________________________________________________________________
110 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Arizona Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class B
Shares sold 347,941 422,767 $ 3,851,908 $ 4,562,500
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 174,462 183,091 1,929,149 1,975,490
- -------------------------------------------------------------------------------
Shares converted
to Class A (582,252) (243,001) (6,441,636) (2,628,449)
- -------------------------------------------------------------------------------
Shares redeemed (1,248,248) (1,698,740) (13,807,130) (18,255,043)
- -------------------------------------------------------------------------------
Net decrease (1,308,097) (1,335,883) $(14,467,709) $(14,345,502)
===============================================================================
Class C
Shares sold 753,354 245,890 $ 8,347,411 $ 2,642,897
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 50,413 46,972 557,696 506,454
- -------------------------------------------------------------------------------
Shares redeemed (403,172) (773,418) (4,461,256) (8,310,063)
- -------------------------------------------------------------------------------
Net increase
(decrease) 400,595 (480,556) $ 4,443,851 $ (5,160,712)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
Florida September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 3,054,191 1,710,561 $ 31,538,480 $ 17,415,995
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 277,465 251,493 2,860,377 2,560,987
- -------------------------------------------------------------------------------
Shares converted
from Class B 1,201,167 563,078 12,402,455 5,753,892
- -------------------------------------------------------------------------------
Shares redeemed (2,036,995) (3,384,839) (20,972,424) (34,394,909)
- -------------------------------------------------------------------------------
Net increase
(decrease) 2,495,828 (859,707) $ 25,828,888 $ (8,664,035)
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 111
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
Florida September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class B
Shares sold 395,639 584,033 $ 4,081,616 $ 5,967,037
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 171,181 230,160 1,764,739 2,346,053
- -------------------------------------------------------------------------------
Shares converted
to Class A (1,200,412) (562,716) (12,402,455) (5,753,892)
- -------------------------------------------------------------------------------
Shares redeemed (1,846,855) (2,821,698) (19,026,418) (28,652,939)
- -------------------------------------------------------------------------------
Net decrease (2,480,447) (2,570,221) $(25,582,518) $(26,093,741)
===============================================================================
Class C
Shares sold 558,919 454,345 $ 5,767,085 $ 4,623,863
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 96,268 88,898 992,651 906,337
- -------------------------------------------------------------------------------
Shares redeemed (592,144) (1,332,473) (6,107,519) (13,538,490)
- -------------------------------------------------------------------------------
Net increase
(decrease) 63,043 (789,230) $ 652,217 $ (8,008,290)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
Massachusetts September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 1,113,609 493,792 $ 12,245,067 $ 5,319,266
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 123,249 119,908 1,354,163 1,294,866
- -------------------------------------------------------------------------------
Shares converted
from Class B 537,902 246,649 5,914,420 2,665,723
- -------------------------------------------------------------------------------
Shares redeemed (573,238) (1,516,546) (6,289,262) (16,318,133)
- -------------------------------------------------------------------------------
Net increase
(decrease) 1,201,522 (656,197) $ 13,224,388 $ (7,038,278)
===============================================================================
_______________________________________________________________________________
112 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
Massachusetts September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class B
Shares sold 285,376 592,959 $ 3,124,965 $ 6,408,781
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 148,378 191,847 1,626,839 2,068,284
- -------------------------------------------------------------------------------
Shares converted
to Class A (538,867) (247,107) (5,914,420) (2,665,723)
- -------------------------------------------------------------------------------
Shares redeemed (1,120,985) (1,590,598) (12,282,946) (17,116,730)
- -------------------------------------------------------------------------------
Net decrease (1,226,098) (1,052,899) $(13,445,562) $(11,305,388)
===============================================================================
Class C
Shares sold 403,369 229,325 $ 4,423,251 $ 2,465,081
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 87,872 102,555 963,499 1,106,428
- -------------------------------------------------------------------------------
Shares redeemed (574,758) (1,389,337) (6,300,093) (14,970,919)
- -------------------------------------------------------------------------------
Net decrease (83,517) (1,057,457) $ (913,343) $(11,399,410)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
Michigan September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 1,427,432 685,970 $ 15,559,730 $ 7,322,243
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 142,408 135,740 1,551,292 1,451,930
- -------------------------------------------------------------------------------
Shares converted
from Class B 130,504 159,363 1,419,836 1,703,482
- -------------------------------------------------------------------------------
Shares redeemed (885,446) (1,736,145) (9,645,744) (18,537,487)
- -------------------------------------------------------------------------------
Net increase
(decrease) 814,898 (755,072) $ 8,885,114 $ (8,059,832)
===============================================================================
Class B
Shares sold 264,822 330,858 $ 2,879,800 $ 3,534,645
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 113,996 138,828 1,239,254 1,483,681
- -------------------------------------------------------------------------------
Shares converted
to Class A (130,719) (159,616) (1,419,836) (1,703,482)
- -------------------------------------------------------------------------------
Shares redeemed (845,977) (1,327,858) (9,199,199) (14,127,851)
- -------------------------------------------------------------------------------
Net decrease (597,878) (1,017,788) $ (6,499,981) $(10,813,007)
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 113
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
Michigan September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class C
Shares sold 654,424 511,806 $ 7,118,899 $ 5,462,625
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 120,364 134,326 1,308,696 1,435,404
- -------------------------------------------------------------------------------
Shares redeemed (824,478) (1,771,487) (8,968,528) (18,892,235)
- -------------------------------------------------------------------------------
Net decrease (49,690) (1,125,355) $ (540,933) $(11,994,206)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
Minnesota September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 1,005,853 835,101 $ 10,290,189 $ 8,472,492
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 143,633 147,489 1,468,164 1,490,538
- -------------------------------------------------------------------------------
Shares converted
from Class B 95,260 273,039 972,353 2,768,139
- -------------------------------------------------------------------------------
Shares redeemed (853,580) (1,510,873) (8,730,657) (15,207,560)
- -------------------------------------------------------------------------------
Net increase
(decrease) 391,166 (255,244) $ 4,000,049 $ (2,476,391)
===============================================================================
Class B
Shares sold 59,851 69,211 $ 610,556 $ 696,429
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 37,033 47,422 378,375 479,462
- -------------------------------------------------------------------------------
Shares converted
to Class A (95,282) (273,093) (972,353) (2,768,139)
- -------------------------------------------------------------------------------
Shares redeemed (260,907) (569,696) (2,665,925) (5,709,020)
- -------------------------------------------------------------------------------
Net decrease (259,305) (726,156) $ (2,649,347) $ (7,301,268)
===============================================================================
Class C
Shares sold 247,982 188,820 $ 2,537,909 $ 1,921,416
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 40,700 43,222 416,410 436,976
- -------------------------------------------------------------------------------
Shares redeemed (223,533) (510,220) (2,284,792) (5,140,475)
- -------------------------------------------------------------------------------
Net increase
(decrease) 65,149 (278,178) $ 669,527 $ (2,782,083)
===============================================================================
_______________________________________________________________________________
114 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
New Jersey September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 698,884 853,157 $ 6,934,437 $ 8,224,363
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 212,447 216,331 2,109,626 2,115,072
- -------------------------------------------------------------------------------
Shares converted
from Class B 852,780 409,676 8,474,476 4,000,360
- -------------------------------------------------------------------------------
Shares redeemed (1,668,847) (2,066,696) (16,555,950) (20,116,127)
- -------------------------------------------------------------------------------
Net increase
(decrease) 95,264 (587,532) $ 962,589 $ (5,776,332)
===============================================================================
Class B
Shares sold 363,143 697,740 $ 3,606,473 $ 6,850,735
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 208,665 275,371 2,071,969 2,695,250
- -------------------------------------------------------------------------------
Shares converted
to Class A (852,370) (409,570) (8,474,476) (4,000,360)
- -------------------------------------------------------------------------------
Shares redeemed (2,309,239) (3,296,698) (22,929,685) (32,204,881)
- -------------------------------------------------------------------------------
Net decrease (2,589,801) (2,733,157) $(25,725,719) $(26,659,256)
===============================================================================
Class C
Shares sold 303,012 417,412 $ 3,014,021 $ 4,097,945
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 99,506 122,163 988,708 1,195,852
- -------------------------------------------------------------------------------
Shares redeemed (692,695) (1,340,581) (6,874,790) (13,099,186)
- -------------------------------------------------------------------------------
Net decrease (290,177) (801,006) $ (2,872,061) $ (7,805,389)
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 115
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Ohio Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 1,499,480 1,886,009 $ 15,258,582 $ 19,017,967
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 261,022 220,493 2,657,680 2,210,176
- -------------------------------------------------------------------------------
Shares converted
from Class B 511,564 388,061 5,209,768 3,893,738
- -------------------------------------------------------------------------------
Shares redeemed (1,555,717) (2,223,776) (15,860,873) (22,211,418)
- -------------------------------------------------------------------------------
Net increase 716,349 270,787 $ 7,265,157 $ 2,910,463
===============================================================================
Class B
Shares sold 338,582 662,437 $ 3,441,546 $ 6,647,136
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 176,471 199,607 1,794,778 2,004,218
- -------------------------------------------------------------------------------
Shares converted
to Class A (511,963) (388,345) (5,209,768) (3,893,738)
- -------------------------------------------------------------------------------
Shares redeemed (1,512,207) (1,829,708) (15,387,457) (18,259,873)
- -------------------------------------------------------------------------------
Net decrease (1,509,117) (1,356,009) $(15,360,901) $(13,502,257)
===============================================================================
Class C
Shares sold 679,901 796,592 $ 6,922,394 $ 8,009,879
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 120,262 129,208 1,223,960 1,295,135
- -------------------------------------------------------------------------------
Shares redeemed (880,040) (1,527,990) (8,938,079) (15,224,407)
- -------------------------------------------------------------------------------
Net decrease (79,877) (602,190) $ (791,725) $ (5,919,393)
===============================================================================
_______________________________________________________________________________
116 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
Pennsylvania September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 720,496 677,551 $ 7,598,951 $ 7,100,907
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 225,234 217,766 2,377,548 2,274,994
- -------------------------------------------------------------------------------
Shares converted
from Class B 567,538 402,276 5,992,252 4,196,909
- -------------------------------------------------------------------------------
Shares redeemed (1,133,334) (2,275,049) (11,941,959) (23,664,109)
- -------------------------------------------------------------------------------
Net increase
(decrease) 379,934 (977,456) $ 4,026,792 $(10,091,299)
===============================================================================
Class B
Shares sold 220,882 454,948 $ 2,332,381 $ 4,771,620
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 129,930 161,398 1,371,107 1,686,496
- -------------------------------------------------------------------------------
Shares converted
to Class A (567,461) (402,276) (5,992,252) (4,196,909)
- -------------------------------------------------------------------------------
Shares redeemed (1,117,373) (1,466,692) (11,785,503) (15,284,200)
- -------------------------------------------------------------------------------
Net decrease (1,334,022) (1,252,622) $(14,074,267) $(13,022,993)
===============================================================================
Class C
Shares sold 295,817 416,703 $ 3,115,893 $ 4,360,442
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 83,409 99,105 880,384 1,036,103
- -------------------------------------------------------------------------------
Shares redeemed (533,727) (1,176,051) (5,621,236) (12,235,107)
- -------------------------------------------------------------------------------
Net decrease (154,501) (660,243) $ (1,624,959) $ (6,838,562)
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 117
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
Virginia September 30, September 30, September 30, September 30,
Portfolio 2005 2004 2005 2004
------------ ------------ -------------- --------------
Class A
Shares sold 1,852,144 721,090 $ 20,080,730 $ 7,741,295
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 225,838 172,805 2,448,903 1,853,259
- -------------------------------------------------------------------------------
Shares converted
from Class B 1,040,313 346,135 11,278,931 3,702,656
- -------------------------------------------------------------------------------
Shares redeemed (878,123) (1,945,886) (9,519,221) (20,929,706)
- -------------------------------------------------------------------------------
Net increase
(decrease) 2,240,172 (705,856) $ 24,289,343 $ (7,632,496)
===============================================================================
Class B
Shares sold 246,812 332,963 $ 2,669,914 $ 3,563,832
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 165,916 208,167 1,794,786 2,229,060
- -------------------------------------------------------------------------------
Shares converted
to Class A (1,042,236) (346,793) (11,278,931) (3,702,656)
- -------------------------------------------------------------------------------
Shares redeemed (1,203,697) (1,747,995) (13,017,637) (18,646,618)
- -------------------------------------------------------------------------------
Net decrease (1,833,205) (1,553,658) $(19,831,868) $(16,556,382)
===============================================================================
Class C
Shares sold 520,792 279,406 $ 5,635,955 $ 2,993,497
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 85,500 84,969 924,567 909,079
- -------------------------------------------------------------------------------
Shares redeemed (547,340) (818,991) (5,900,155) (8,736,037)
- -------------------------------------------------------------------------------
Net increase
(decrease) 58,952 (454,616) $ 660,367 $ (4,833,461)
===============================================================================
NOTE F
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $250 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions, in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the year ended September 30, 2005.
_______________________________________________________________________________
118 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
NOTE G
Distributions To Shareholders
The tax character of distributions paid during the fiscal years ended September
30, 2005 and September 30, 2004 were as follows:
Arizona Portfolio 2005 2004
============== ==============
Distributions paid from:
Tax-exempt income $ 7,400,654 $ 8,726,911
Ordinary income 46,781 1,347
-------------- --------------
Total distributions paid $ 7,447,435 $ 8,728,258
============== ==============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (1,048,274)(a)
Unrealized appreciation/(depreciation) 7,451,451(b)
--------------
Total accumulated earnings/(deficit) $ 6,403,177(c)
==============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $1,048,274 of which $577,141 expires in the
year 2008, $383,250 expires in the year 2010 and $87,883 expires in the year
2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$1,731,528.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes gains/losses on certain
derivative instruments and the difference between the book and tax treatment of
swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income and the tax treatment of swap
income, resulted in a net decrease in distributions in excess of net investment
income, an increase in accumulated net realized loss on investment
transactions, and a decrease in additional paid in capital. This
reclassification had no effect on net assets.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 119
Florida Portfolio 2005 2004
============== ==============
Distributions paid from:
Tax-exempt income $ 9,106,816 $ 10,571,299
Ordinary income 102,519 59,862
-------------- --------------
Total distributions paid $ 9,209,335 $ 10,631,161
============== ==============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (8,759,470)(a)
Unrealized appreciation/(depreciation) 10,084,729(b)
--------------
Total accumulated earnings/(deficit) $ 1,325,259(c)
==============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $8,759,470 of which $5,279,565 expires in
the year 2008, $3,475,986 expires in the year 2009 and $3,919 expires in the
year 2010. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$1,388,484.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the difference between the book and tax treatment of
swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income and the tax treatment of swap
income, resulted in a net decrease in distributions in excess of net investment
income, an increase in accumulated net realized loss on investment
transactions, and a decrease in additional paid in capital. This
reclassification had no effect on net assets.
_______________________________________________________________________________
120 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Massachusetts Portfolio 2005 2004
============== ==============
Distributions paid from:
Tax-exempt income $ 5,160,022 $ 6,350,688
Ordinary income 129,453 19,660
-------------- --------------
Total distributions paid $ 5,289,475 $ 6,370,348
============== ==============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (9,987,612)(a)
Unrealized appreciation/(depreciation) 7,564,071(b)
--------------
Total accumulated earnings/(deficit) $ (2,423,541)(c)
==============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $9,987,612 of which $6,209,284 expires in
the year 2008, $1,585,051 expires in the year 2009 and $2,193,277 expires in
the year 2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$990,309.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the difference between the book and tax treatment of
swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income and the tax treatment of swap
income, resulted in a net decrease in distributions in excess of net investment
income, an increase in accumulated net realized loss on investment
transactions, and a decrease in additional paid in capital. This
reclassification had no effect on net assets.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 121
Michigan Portfolio 2005 2004
============== ==============
Distributions paid from:
Tax-exempt income $ 5,052,285 $ 6,024,571
Ordinary income 46,347 40,269
Long term capital gains 100,074 -0-
-------------- --------------
Total distributions paid $ 5,198,706 $ 6,064,840
============== ==============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Long term capital gains $ 116,322
Unrealized appreciation/(depreciation) 6,160,210(a)
--------------
Total accumulated earnings/(deficit) $ 6,276,532(b)
==============
(a) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the difference between the book and tax treatment of
swap income.
(b) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the fiscal year ended September 30, 2005, the Portfolio utilized capital
loss carryforwards of $668,763.
During the current fiscal year, permanent differences, primarily due to the tax
treatment of swap income, resulted in a net decrease in distributions in excess
of net investment income and a decrease in accumulated net realized gain on
investment transactions. This reclassification had no effect on net assets.
_______________________________________________________________________________
122 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Minnesota Portfolio 2005 2004
============== ==============
Distributions paid from:
Tax-exempt income $ 3,772,527 $ 4,361,565
Ordinary income 104,128 7,082
-------------- --------------
Total distributions paid $ 3,876,655 $ 4,368,647
============== ==============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (1,857,813)(a)
Unrealized appreciation/(depreciation) 4,520,472(b)
--------------
Total accumulated earnings/(deficit) $ 2,662,659(c)
==============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $1,857,813 of which $1,051,696 expires in
the year 2008, $160,146 expires in the year 2009, $46,432 expires in the year
2010, $179,795 expires in the year 2011, $142,635 expires in the year 2012 and
$277,109 expires in the year 2013. To the extent future capital gains are
offset by capital loss carryforwards, such gains will not be distributed.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales, and the difference between the book and tax treatment of
swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income and the tax treatment of swap
income, resulted in a net decrease in distributions in excess of net investment
income, an increase in accumulated net realized loss on investment
transactions, and a decrease in additional paid in capital. This
reclassification had no effect on net assets.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 123
New Jersey Portfolio 2005 2004
============== ==============
Distributions paid from:
Tax-exempt income $ 6,957,994 $ 8,996,884
Ordinary income 282,927 1,128
-------------- --------------
Total distributions paid $ 7,240,921 $ 8,998,012
============== ==============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (14,542,787)(a)
Unrealized appreciation/(depreciation) 10,283,186(b)
--------------
Total accumulated earnings/(deficit) $ (4,259,601)(c)
==============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $14,542,787 of which $2,794,762 expires in
the year 2008, $1,077,263 expires in the year 2009, $4,688,584 expires in the
year 2010, $5,617,272 expires in the year 2011 and $364,906 expires in the year
2012. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$532,533.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes of gains/losses on
certain derivative instruments, and the difference between book and the
treatment of swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income and the tax treatment of swap
income, resulted in a net decrease in distributions in excess of net investment
income, an increase in accumulated net realized loss on investment
transactions, and a decrease in additional paid in capital. This
reclassification had no effect on net assets.
_______________________________________________________________________________
124 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Portfolio 2005 2004
============== ==============
Distributions paid from:
Tax-exempt income $ 7,265,838 $ 8,184,647
Ordinary income 59,799 121,101
-------------- --------------
Total distributions paid $ 7,325,637 $ 8,305,748
============== ==============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax exempt income $ 37,927
Accumulated capital and other losses (7,249,248)(a)
Unrealized appreciation/(depreciation) 7,870,152(b)
--------------
Total accumulated earnings/(deficit) $ 658,831(c)
==============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $7,249,248 of which $1,952,430 expires in
the year 2008, $1,639,021 expires in the year 2009, $3,620,192 expires in the
year 2011 and $37,605 expires in the year 2012. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. During the fiscal year ended September 30, 2005 the Portfolio
utilized capital loss carryforwards of $539,100.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales , the realization for tax purposes of gains/losses on
certain derivative instruments, and the difference between book and tax
treatment of swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the current fiscal year, permanent differences, primarily due to the tax
treatment of swap income, resulted in a net decrease in distributions in excess
of net investment income and an increase in accumulated net realized loss on
investment transactions. This reclassification had no effect on net assets.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 125
Pennsylvania Portfolio 2005 2004
============== ==============
Distributions paid from:
Tax-exempt income $ 6,033,362 $ 7,539,043
Ordinary income 59,374 48,683
-------------- --------------
Total distributions paid $ 6,092,736 $ 7,587,726
============== ==============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed Tax Exempt Income $ 8,595
Accumulated capital and other losses (2,420,483)(a)
Unrealized appreciation/(depreciation) 6,942,506(b)
--------------
Total accumulated earnings/(deficit) $ 4,530,618(c)
==============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $2,420,483 of which $1,699,951 expires in
the year 2008, $274,791 expires in the year 2010 and $445,741 expires in the
year 2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$2,082,560.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation)are attributable primarily to the tax deferral of
losses on wash sales, and the difference between book and tax treatment of swap
income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the current fiscal year, permanent differences, primarily due to the tax
treatment of swap income, resulted in a net decrease in distributions in excess
of net investment income and an increase in accumulated net realized loss on
investment transactions. This reclassification had no effect on net assets.
_______________________________________________________________________________
126 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia Portfolio 2005 2004
============== ==============
Distributions paid from:
Tax-exempt income $ 6,674,553 $ 7,342,740
Ordinary income 45,915 49,328
-------------- --------------
Total distributions paid $ 6,720,468 $ 7,392,068
============== ==============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax-exempt income $ 313,192
Accumulated capital and other losses (2,593,499)(a)
Unrealized appreciation/(depreciation) 6,656,866(b)
--------------
Total accumulated earnings/(deficit) $ 4,376,559(c)
==============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $2,593,499 of which $599,723 expires in the
year 2008, $1,200,330 expires in the year 2009 and $793,446 expires in the year
2010. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$966,719.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales the realization for tax purposes of gains/losses on
certain derivative instruments, and the difference between book and tax
treatment of swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the current fiscal year, permanent differences, primarily due to the tax
treatment of swap income, resulted in a net increase in distributions in excess
of net investment income and an increase in accumulated net realized loss on
investment transactions. This reclassification had no effect on net assets.
NOTE H
Risks Involved in Investing in the Fund
Credit Risk--The Portfolios of the AllianceBernstein Municipal Income Fund II
are State Portfolios that may invest a large portion of their assets in a
particular state's municipal securities and their various political
subdivisions, and the performance of each of these Portfolios may be closely
tied to economic conditions within the applicable state and the financial
condition of that state and its agencies and municipalities.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications.The Fund's maximum
exposure under these arrangements is unknown.However, the Fund has not had
prior claims or losses persuant to these contracts and expects the risk of loss
thereunder to be remote.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 127
NOTE I
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the
_______________________________________________________________________________
128 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Adviser's Board, is continuing to direct and oversee an internal investigation
and a comprehensive review of the facts and circumstances relevant to the SEC's
and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a purported class action complaint entitled Hindo, et al.
v. AllianceBernstein Growth & Income Fund, et al. ("Hindo Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), Alliance Capital Management Corporation, AXA Financial, Inc., the
AllianceBernstein Funds, certain officers of the Adviser ("Alliance
defendants"), and certain other defendants not affiliated with the Adviser, as
well as unnamed Doe defendants. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Funds. The Hindo Complaint alleges
that certain of the Alliance defendants failed to disclose that they improperly
allowed certain hedge funds and other unidentified parties to engage in "late
trading" and "market timing" of AllianceBernstein Fund securities, violating
Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the
Exchange Act and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an
unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
generally similar to those in the Hindo Complaint were filed in various federal
and state courts against the Adviser and certain other defendants, and others
may be filed. The plaintiffs in such lawsuits have asserted a variety of
theories for recovery including, but not limited to, violations of the
Securities Act, the Exchange Act, the Advisers Act, the Investment Company Act,
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
certain state securities laws, and common law. On February 20, 2004, the
Judicial Panel on Multidistrict Litigation transferred all federal actions, and
removed all state court actions, to the United States District Court for the
District of Maryland (the "Mutual Fund MDL"). The plaintiffs in the removed
actions have since moved for remand, and that motion is pending.
On September 29, 2004, plaintiffs filed consolidated amended complaints with
respect to four claim types: mutual fund shareholder claims; mutual fund
derivative claims; derivative claims brought on behalf of Alliance Holding; and
claims brought under ERISA by participants in the Profit Sharing Plan for
Employees of the Adviser. All four complaints include substantially identical
factual alle-
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 129
gations, which appear to be based in large part on the SEC Order and the NYAG
Order. The claims in the mutual fund derivative consolidated amended complaint
are generally based on the theory that all fund advisory agreements,
distribution agreements and 12b-1 plans between the Adviser and the
AllianceBernstein Funds should be invalidated, regardless of whether market
timing occurred in each individual fund, because each was approved by fund
trustees on the basis of materially misleading information with respect to the
level of market timing permitted in funds managed by the Adviser. The claims
asserted in the other three consolidated amended complaints are similar to
those that the respective plaintiffs asserted in their previous federal
lawsuits. All of these lawsuits seek an unspecified amount of damages. The
Alliance defendants have moved to dismiss the complaints, and those motions are
pending.
On February 10, 2004, the Adviser received (i) a subpoena duces tecum from the
Office of the Attorney General of the State of West Virginia and (ii) a request
for information from West Virginia's Office of the State Auditor, Securities
Commission (the "West Virginia Securities Commission") (together, the
"Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.
On April 11, 2005, a complaint entitled The Attorney General of the State of
West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed
against the Adviser, Alliance Holding, and various other defendants not
affiliated with the Adviser. The WVAG Complaint was filed in the Circuit Court
of Marshall County, West Virginia by the Attorney General of the State of West
Virginia. The WVAG Complaint makes factual allegations generally similar to
those in the Hindo Complaint. On May 31, 2005, defendants removed the WVAG
Complaint to the United States District Court for the Northern District of West
Virginia. On July 12, 2005, plaintiff moved to remand. On October 19, 2005, the
WVAGComplaint was transferred to the Mutual Fund MDL.
On August 30, 2005, the deputy commissioner of securities of the West Virginia
Securities Commission signed a "Summary Order to Cease and Desist, and Notice
of Right to Hearing" addressed to the Adviser and Alliance Holding. The Summary
Order claims that the Adviser and Alliance Holding violated the West Virginia
Uniform Securities Act, and makes factual allegations generally similar to
those in the Commission Order and the NYAGOrder. The Adviser intends to
vigorously defend against the allegations in the WVAG Complaint.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
_______________________________________________________________________________
130 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed. On October 19,
2005, the District Court granted in part, and denied in part, defendants'
motion to dismiss the Aucoin Complaint and as a result the only claim remaining
is plaintiffs' Section 36(b) claim.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the AllianceBernstein
Mutual Funds' shares or other adverse consequences to the AllianceBernstein
Mutual Funds. However, the Adviser believes that these matters are not likely
to have a material adverse effect on its ability to perform advisory services
relating to the AllianceBernstein Mutual Funds.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 131
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Arizona Portfolio
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.95 $10.76 $11.02 $10.80 $10.47
Income From Investment
Operations
Net investment income(b)(c) .47 .51 .51 .51 .54
Net realized and unrealized
gain (loss) on investment
transactions .11 .19 (.26) .26 .34
Net increase in net asset value
from operations .58 .70 .25 .77 .88
Less: Dividends and
Distributions
Dividends from net
investment income (.47) (.51) (.51) (.51) (.54)
Distributions in excess of
net investment income -0- -0- -0- (.04) (.01)
Total dividends and
distributions (.47) (.51) (.51) (.55) (.55)
Net asset value, end of period $11.06 $10.95 $10.76 $11.02 $10.80
Total Return
Total investment return based
on net asset value(d) 5.36% 6.64% 2.35% 7.33% 8.56%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $111,704 $88,701 $101,040 $121,245 $88,261
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .78% .78% .78% .78% .78%
Expenses, before waivers/
reimbursements .97% 1.13% 1.11% 1.12% 1.22%
Net investment income,
net of waivers/
reimbursements 4.22% 4.69% 4.72% 4.73% 5.08%
Portfolio turnover rate 25% 28% 28% 11% 119%
See footnote summary on page 159.
_______________________________________________________________________________
132 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Arizona Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.94 $10.74 $11.00 $10.78 $10.46
Income From Investment
Operations
Net investment income(b)(c) .39 .43 .43 .43 .47
Net realized and unrealized
gain (loss) on investment
transactions .10 .20 (.26) .27 .33
Net increase in net asset value
from operations .49 .63 .17 .70 .80
Less: Dividends and
Distributions
Dividends from net
investment income (.39) (.43) (.43) (.43) (.47)
Distributions in excess of
net investment income -0- -0- -0- (.05) (.01)
Total dividends and
distributions (.39) (.43) (.43) (.48) (.48)
Net asset value, end of period $11.04 $10.94 $10.74 $11.00 $10.78
Total Return
Total investment return based
on net asset value(d) 4.56% 5.98% 1.62% 6.65% 7.76%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $63,255 $76,951 $89,938 $92,349 $56,024
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.68% 1.84% 1.82% 1.82% 1.93%
Net investment income,
net of waivers/
reimbursements 3.54% 4.00% 4.03% 4.02% 4.41%
Portfolio turnover rate 25% 28% 28% 11% 119%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 133
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Arizona Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.94 $10.74 $11.00 $10.78 $10.46
Income From Investment
Operations
Net investment income(b)(c) .39 .43 .43 .43 .47
Net realized and unrealized
gain (loss) on investment
transactions .10 .20 (.26) .27 .33
Net increase in net asset value
from operations .49 .63 .17 .70 .80
Less: Dividends and
Distributions
Dividends from net
investment income (.39) (.43) (.43) (.43) (.47)
Distributions in excess of
net investment income -0- -0- -0- (.05) (.01)
Total dividends and
distributions (.39) (.43) (.43) (.48) (.48)
Net asset value, end of period $11.04 $10.94 $10.74 $11.00 $10.78
Total Return
Total investment return based
on net asset value(d) 4.56% 5.98% 1.62% 6.65% 7.76%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $24,926 $20,305 $25,110 $24,258 $13,407
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.67% 1.84% 1.82% 1.82% 1.93%
Net investment income,
net of waivers/
reimbursements 3.53% 4.00% 4.03% 4.00% 4.43%
Portfolio turnover rate 25% 28% 28% 11% 119%
See footnote summary on page 159.
_______________________________________________________________________________
134 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Florida Portfolio
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.25 $10.17 $10.34 $10.16 $9.76
Income From Investment
Operations
Net investment income(b)(c) .47 .49 .49 .52 .53
Net realized and unrealized
gain (loss) on investment
transactions .03 .08 (.13) .19 .40
Net increase in net asset value
from operations .50 .57 .36 .71 .93
Less: Dividends and
Distributions
Dividends from net
investment income (.47) (.49) (.53) (.52) (.53)
Distributions in excess of
net investment income -0- -0- -0- (.01) -0-
Total dividends and
distributions (.47) (.49) (.53) (.53) (.53)
Net asset value, end of period $10.28 $10.25 $10.17 $10.34 $10.16
Total Return
Total investment return based
on net asset value(d) 5.01% 5.78% 3.54% 7.21% 9.71%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $127,541 $101,529 $109,543 $109,373 $97,714
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .78% .78% .78% .78% .78%
Expenses, before waivers/
reimbursements .97% 1.10% 1.11% 1.09% 1.13%
Net investment income,
net of waivers/
reimbursements 4.60% 4.83% 4.80% 5.18% 5.33%
Portfolio turnover rate 23% 22% 30% 20% 70%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 135
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Florida Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.26 $10.18 $10.35 $10.17 $9.77
Income From Investment
Operations
Net investment income(b)(c) .40 .42 .42 .45 .46
Net realized and unrealized
gain (loss) on investment
transactions .03 .08 (.14) .18 .39
Net increase in net asset value
from operations .43 .50 .28 .63 .85
Less: Dividends and
Distributions
Dividends from net
investment income (.40) (.42) (.45) (.45) (.45)
Total dividends and
distributions (.40) (.42) (.45) (.45) (.45)
Net asset value, end of period $10.29 $10.26 $10.18 $10.35 $10.17
Total Return
Total investment return based
on net asset value(d) 4.29% 4.96% 2.82% 6.45% 8.92%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $53,996 $79,266 $104,874 $105,583 $87,603
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.67% 1.81% 1.81% 1.79% 1.84%
Net investment income,
net of waivers/
reimbursements 3.91% 4.12% 4.09% 4.47% 4.62%
Portfolio turnover rate 23% 22% 30% 20% 70%
See footnote summary on page 159.
_______________________________________________________________________________
136 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Florida Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.25 $10.18 $10.35 $10.17 $9.77
Income From Investment
Operations
Net investment income(b)(c) .40 .42 .42 .45 .46
Net realized and unrealized
gain (loss) on investment
transactions .04 .07 (.14) .18 .39
Net increase in net asset value
from operations .44 .49 .28 .63 .85
Less: Dividends and
Distributions
Dividends from net
investment income (.40) (.42) (.45) (.45) (.45)
Total dividends and
distributions (.40) (.42) (.45) (.45) (.45)
Net asset value, end of period $10.29 $10.25 $10.18 $10.35 $10.17
Total Return
Total investment return based
on net asset value(d) 4.38% 4.96% 2.82% 6.45% 8.93%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $39,950 $39,170 $46,929 $49,102 $40,360
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.67% 1.81% 1.81% 1.79% 1.83%
Net investment income,
net of waivers/
reimbursements 3.90% 4.13% 4.09% 4.47% 4.64%
Portfolio turnover rate 23% 22% 30% 20% 70%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 137
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Massachusetts Portfolio
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.92 $10.79 $11.06 $11.05 $10.59
Income From Investment
Operations
Net investment income(b)(c) .47 .51 .51 .54 .56
Net realized and unrealized
gain (loss) on investment
transactions .05 .13 (.26) .04 .47
Net increase in net asset value
from operations .52 .64 .25 .58 1.03
Less: Dividends and
Distributions
Dividends from net
investment income (.48) (.51) (.52) (.54) (.56)
Distributions in excess of
net investment income -0- -0- -0- (.03) (.01)
Total dividends and
distributions (.48) (.51) (.52) (.57) (.57)
Net asset value, end of period $10.96 $10.92 $10.79 $11.06 $11.05
Total Return
Total investment return based
on net asset value(d) 4.80% 6.13% 2.39% 5.46% 9.92%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $53,035 $39,749 $46,342 $66,197 $63,384
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .82% .82% .82% .82% .82%
Expenses, before waivers/
reimbursements 1.02% 1.19% 1.17% 1.12% 1.19%
Net investment income,
net of waivers/
reimbursements 4.29% 4.73% 4.71% 4.97% 5.20%
Portfolio turnover rate 25% 26% 28% 27% 108%
See footnote summary on page 159.
_______________________________________________________________________________
138 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Massachusetts Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.91 $10.77 $11.03 $11.03 $10.57
Income From Investment
Operations
Net investment income(b)(c) .40 .44 .44 .47 .49
Net realized and unrealized
gain (loss) on investment
transactions .03 .14 (.25) .03 .47
Net increase in net asset value
from operations .43 .58 .19 .50 .96
Less: Dividends and
Distributions
Dividends from net
investment income (.40) (.44) (.45) (.47) (.49)
Distributions in excess of
net investment income -0- -0- -0- (.03) (.01)
Total dividends and
distributions (.40) (.44) (.45) (.50) (.50)
Net asset value, end of period $10.94 $10.91 $10.77 $11.03 $11.03
Total Return
Total investment return based
on net asset value(d) 4.00% 5.38% 1.76% 4.69% 9.22%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $50,203 $63,430 $73,979 $79,216 $62,190
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.52% 1.52% 1.52% 1.52% 1.52%
Expenses, before waivers/
reimbursements 1.73% 1.90% 1.89% 1.83% 1.90%
Net investment income,
net of waivers/
reimbursements 3.61% 4.04% 4.02% 4.28% 4.53%
Portfolio turnover rate 25% 26% 28% 27% 108%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 139
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Massachusetts Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.91 $10.77 $11.03 $11.03 $10.57
Income From Investment
Operations
Net investment income(b)(c) .40 .44 .44 .47 .49
Net realized and unrealized
gain(loss) on investment
transactions .03 .14 (.25) .03 .47
Net increase in net asset value
from operations .43 .58 .19 .50 .96
Less: Dividends and
Distributions
Dividends from net
investment income (.40) (.44) (.45) (.47) (.49)
Distributions in excess of
net investment income -0- -0- -0- (.03) (.01)
Total dividends and
distributions (.40) (.44) (.45) (.50) (.50)
Net asset value, end of period $10.94 $10.91 $10.77 $11.03 $11.03
Total Return
Total investment return based
on net asset value(d) 3.99% 5.38% 1.76% 4.69% 9.22%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $34,789 $35,598 $46,542 $53,156 $44,688
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.52% 1.52% 1.52% 1.52% 1.52%
Expenses, before waivers/
reimbursements 1.73% 1.89% 1.88% 1.82% 1.90%
Net investment income,
net of waivers/
reimbursements 3.61% 4.04% 4.02% 4.28% 4.53%
Portfolio turnover rate 25% 26% 28% 27% 108%
See footnote summary on page 159.
_______________________________________________________________________________
140 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Michigan Portfolio
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.79 $10.69 $10.91 $10.63 $10.16
Income From Investment
Operations
Net investment income(b)(c) .46 .48 .47 .49 .52
Net realized and unrealized
gain (loss) on investment
transactions .09 .11 (.17) .32 .48
Net increase in net asset
value from operations .55 .59 .30 .81 1.00
Less: Dividends and
Distributions
Dividends from net
investment income (.46) (.49) (.52) (.49) (.52)
Distributions in excess of
net investment income -0- -0- -0- (.04) (.01)
Total dividends and
distributions (.46) (.49) (.52) (.53) (.53)
Net asset value, end of period $10.88 $10.79 $10.69 $10.91 $10.63
Total Return
Total investment return based
on net asset value(d) 5.16% 5.65% 2.66% 7.87% 10.11%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $54,635 $45,362 $53,022 $55,396 $32,804
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .99% 1.01% 1.01% 1.01% 1.01%
Expenses, before waivers/
reimbursements 1.05% 1.20% 1.20% 1.21% 1.44%
Net investment income,
net of waivers/
reimbursements 4.19% 4.51% 4.38% 4.57% 5.01%
Portfolio turnover rate 18% 18% 46% 18% 115%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 141
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Michigan Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.77 $10.67 $10.89 $10.62 $10.15
Income From Investment
Operations
Net investment income(b)(c) .38 .41 .40 .41 .45
Net realized and unrealized
gain (loss) on investment
transactions .10 .10 (.18) .32 .48
Net increase in net asset value
from operations .48 .51 .22 .73 .93
Less: Dividends and
Distributions
Dividends from net
investment income (.39) (.41) (.44) (.41) (.45)
Distributions in excess of
net investment income -0- -0- -0- (.05) (.01)
Total dividends and
distributions (.39) (.41) (.44) (.46) (.46)
Net asset value, end of period $10.86 $10.77 $10.67 $10.89 $10.62
Total Return
Total investment return based
on net asset value(d) 4.47% 4.91% 1.95% 7.06% 9.39%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $41,516 $47,605 $58,034 $53,097 $29,436
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.70% 1.71% 1.71% 1.71% 1.71%
Expenses, before waivers/
reimbursements 1.76% 1.91% 1.92% 1.92% 2.16%
Net investment income,
net of waivers/
reimbursements 3.50% 3.81% 3.69% 3.88% 4.34%
Portfolio turnover rate 18% 18% 46% 18% 115%
See footnote summary on page 159.
_______________________________________________________________________________
142 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Michigan Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.77 $10.67 $10.89 $10.62 $10.14
Income From Investment
Operations
Net investment income(b)(c) .38 .41 .40 .41 .45
Net realized and unrealized
gain (loss) on investment
transactions .10 .10 (.18) .32 .49
Net increase in net asset value
from operations .48 .51 .22 .73 .94
Less: Dividends and
Distributions
Dividends from net
investment income (.38) (.41) (.44) (.41) (.45)
Distributions in excess of
net investment income -0- -0- -0- (.05) (.01)
Total dividends and
distributions (.38) (.41) (.44) (.46) (.46)
Net asset value, end of period $10.87 $10.77 $10.67 $10.89 $10.62
Total Return
Total investment return based
on net asset value(d) 4.54% 4.91% 1.95% 7.06% 9.50%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $43,225 $43,382 $54,996 $57,818 $24,142
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.70% 1.71% 1.71% 1.71% 1.71%
Expenses, before waivers/
reimbursements 1.75% 1.90% 1.90% 1.93% 2.16%
Net investment income,
net of waivers/
reimbursements 3.50% 3.82% 3.69% 3.86% 4.35%
Portfolio turnover rate 18% 18% 46% 18% 115%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 143
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Minnesota Portfolio
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.14 $10.15 $10.31 $10.09 $9.72
Income From Investment
Operations
Net investment income(b)(c) .42 .44 .45 .48 .52
Net realized and unrealized
gain (loss) on investment
transactions .05 (.01) (.15) .25 .38
Net increase in net asset value
from operations .47 .43 .30 .73 .90
Less: Dividends and
Distributions
Dividends from net
investment income (.42) (.44) (.46) (.48) (.52)
Distributions in excess of
net investment income -0- -0- -0- (.03) (.01)
Total dividends and
distributions (.42) (.44) (.46) (.51) (.53)
Net asset value, end of period $10.19 $10.14 $10.15 $10.31 $10.09
Total Return
Total investment return based
on net asset value(d) 4.72% 4.41% 3.05% 7.46% 9.44%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $69,174 $64,847 $67,521 $65,850 $30,501
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .90% .90% .90% .90% .90%
Expenses, before waivers/
reimbursements 1.12% 1.27% 1.19% 1.29% 1.49%
Net investment income,
net of waivers/
reimbursements 4.12% 4.36% 4.42% 4.75% 5.23%
Portfolio turnover rate 14% 19% 32% 29% 61%
See footnote summary on page 159.
_______________________________________________________________________________
144 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Minnesota Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.14 $10.15 $10.31 $10.08 $9.72
Income From Investment
Operations
Net investment income(b)(c) .35 .37 .38 .40 .45
Net realized and unrealized
gain (loss) on investment
transactions .05 (.01) (.15) .27 .37
Net increase in net asset value
from operations .40 .36 .23 .67 .82
Less: Dividends and
Distributions
Dividends from net
investment income (.35) (.37) (.39) (.40) (.45)
Distributions in excess of
net investment income -0- -0- -0- (.04) (.01)
Total dividends and
distributions (.35) (.37) (.39) (.44) (.46)
Net asset value, end of period $10.19 $10.14 $10.15 $10.31 $10.08
Total Return
Total investment return based
on net asset value(d) 3.99% 3.68% 2.34% 6.84% 8.61%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $14,424 $16,976 $24,366 $24,340 $17,304
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.60% 1.60% 1.60% 1.60% 1.60%
Expenses, before waivers/
reimbursements 1.83% 1.99% 1.90% 1.99% 2.19%
Net investment income,
net of waivers/
reimbursements 3.43% 3.65% 3.72% 4.04% 4.52%
Portfolio turnover rate 14% 19% 32% 29% 61%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 145
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Minnesota Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.15 $10.16 $10.32 $10.10 $9.72
Income From Investment
Operations
Net investment income(b)(c) .35 .37 .38 .40 .45
Net realized and unrealized
gain (loss) on investment
transactions .05 (.01) (.15) .26 .39
Net increase in net asset value
from operations .40 .36 .23 .66 .84
Less: Dividends and
Distributions
Dividends from net
investment income (.35) (.37) (.39) (.40) (.45)
Distributions in excess of
net investment income -0- -0- -0- (.04) (.01)
Total dividends and
distributions (.35) (.37) (.39) (.44) (.46)
Net asset value, end of period $10.20 $10.15 $10.16 $10.32 $10.10
Total Return
Total investment return based
on net asset value(d) 3.98% 3.68% 2.34% 6.72% 8.82%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $17,153 $16,402 $19,248 $20,401 $11,434
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.60% 1.60% 1.60% 1.60% 1.60%
Expenses, before waivers/
reimbursements 1.82% 1.98% 1.89% 1.99% 2.19%
Net investment income,
net of waivers/
reimbursements 3.42% 3.65% 3.70% 4.01% 4.51%
Portfolio turnover rate 14% 19% 32% 29% 61%
See footnote summary on page 159.
_______________________________________________________________________________
146 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
New Jersey Portfolio
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $9.84 $9.80 $10.03 $10.11 $9.92
Income From Investment
Operations
Net investment income(b)(c) .42 .45 .45 .48 .52
Net realized and unrealized
gain (loss) on investment
transactions .07 .04 (.22) (.05) .20
Net increase in net asset value
from operations .49 .49 .23 .43 .72
Less: Dividends and
Distributions
Dividends from net
investment income (.43) (.45) (.46) (.48) (.52)
Distributions in excess of
net investment income -0- -0- -0- (.03) (.01)
Total dividends and
distributions (.43) (.45) (.46) (.51) (.53)
Net asset value, end of period $9.90 $9.84 $9.80 $10.03 $10.11
Total Return
Total investment return based
on net asset value(d) 5.03% 5.05% 2.39% 4.42% 7.33%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $77,570 $76,164 $81,632 $94,865 $80,489
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .87% .87% .87% .87% .87%
Expenses, before waivers/
reimbursements 1.01% 1.16% 1.13% 1.11% 1.13%
Net investment income,
net of waivers/
reimbursements 4.26% 4.60% 4.53% 4.80% 5.04%
Portfolio turnover rate 38% 15% 45% 49% 111%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 147
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
New Jersey Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $9.84 $9.80 $10.04 $10.11 $9.92
Income From Investment
Operations
Net investment income(b)(c) .35 .38 .38 .41 .44
Net realized and unrealized
gain (loss) on investment
transactions .07 .04 (.23) (.04) .20
Net increase in net asset value
from operations .42 .42 .15 .37 .64
Less: Dividends and
Distributions
Dividends from net
investment income (.36) (.38) (.39) (.41) (.44)
Distributions in excess of
net investment income -0- -0- -0- (.03) (.01)
Total dividends and
distributions (.36) (.38) (.39) (.44) (.45)
Net asset value, end of period $9.90 $9.84 $9.80 $10.04 $10.11
Total Return
Total investment return based
on net asset value(d) 4.30% 4.41% 1.56% 3.79% 6.56%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $58,706 $83,835 $110,294 $127,025 $103,889
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.57% 1.57% 1.57% 1.57% 1.57%
Expenses, before waivers/
reimbursements 1.72% 1.87% 1.84% 1.82% 1.84%
Net investment income,
net of waivers/
reimbursements 3.56% 3.89% 3.83% 4.10% 4.33%
Portfolio turnover rate 38% 15% 45% 49% 111%
See footnote summary on page 159.
_______________________________________________________________________________
148 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
New Jersey Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $9.84 $9.81 $10.04 $10.11 $9.93
Income From Investment
Operations
Net investment income(b)(c) .35 .38 .38 .41 .44
Net realized and unrealized
gain (loss) on investment
transactions .07 .03 (.22) (.04) .19
Net increase in net asset value
from operations .42 .41 .16 .37 .63
Less: Dividends and
Distributions
Dividends from net
investment income (.36) (.38) (.39) (.41) (.44)
Distributions in excess of
net investment income -0- -0- -0- (.03) (.01)
Total dividends and
distributions (.36) (.38) (.39) (.44) (.45)
Net asset value, end of period $9.90 $9.84 $9.81 $10.04 $10.11
Total Return
Total investment return based
on net asset value(d) 4.31% 4.30% 1.66% 3.78% 6.45%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $35,279 $37,926 $45,633 $56,295 $46,025
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.57% 1.57% 1.57% 1.57% 1.57%
Expenses, before waivers/
reimbursements 1.71% 1.86% 1.83% 1.81% 1.83%
Net investment income,
net of waivers/
reimbursements 3.56% 3.89% 3.83% 4.10% 4.34%
Portfolio turnover rate 38% 15% 45% 49% 111%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 149
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Ohio Portfolio
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.10 $10.05 $10.02 $10.01 $9.77
Income From Investment
Operations
Net investment income(b)(c) .43 .44 .46 .50 .54
Net realized and unrealized
gain on investment
transactions .03 .05 .05 .04 .23
Net increase in net asset value
from operations .46 .49 .51 .54 .77
Less: Dividends and
Distributions
Dividends from net
investment income (.42) (.44) (.48) (.51) (.53)
Distributions in excess of
net investment income -0- -0- -0- (.02) -0-
Total dividends and
distributions (.42) (.44) (.48) (.53) (.53)
Net asset value, end of period $10.14 $10.10 $10.05 $10.02 $10.01
Total Return
Total investment return based
on net asset value(d) 4.67% 5.02% 5.20% 5.57% 8.04%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $85,749 $78,184 $75,102 $70,223 $46,855
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .85% .85% .85% .85% .85%
Expenses, before waivers/
reimbursements .99% 1.14% 1.15% 1.15% 1.20%
Net investment income,
net of waivers/
reimbursements 4.19% 4.38% 4.59% 4.99% 5.42%
Portfolio turnover rate 23% 33% 23% 34% 32%
See footnote summary on page 159.
_______________________________________________________________________________
150 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Ohio Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.09 $10.04 $10.02 $10.01 $9.77
Income From Investment
Operations
Net investment income(b)(c) .36 .37 .39 .43 .47
Net realized and unrealized
gain on investment
transactions .03 .05 .04 .05 .24
Net increase in net asset value
from operations .39 .42 .43 .48 .71
Less: Dividends and
Distributions
Dividends from net
investment income (.35) (.37) (.41) (.44) (.47)
Distributions in excess of
net investment income -0- -0- -0- (.03) -0-
Total dividends and
distributions (.35) (.37) (.41) (.47) (.47)
Net asset value, end of period $10.13 $10.09 $10.04 $10.02 $10.01
Total Return
Total investment return based
on net asset value(d) 3.95% 4.30% 4.37% 4.87% 7.33%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $55,111 $70,121 $83,422 $73,159 $54,575
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.55% 1.55% 1.55% 1.55% 1.55%
Expenses, before waivers/
reimbursements 1.69% 1.85% 1.86% 1.85% 1.91%
Net investment income,
net of waivers/
reimbursements 3.50% 3.69% 3.88% 4.29% 4.72%
Portfolio turnover rate 23% 33% 23% 34% 32%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 151
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Ohio Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.09 $10.05 $10.02 $10.02 $9.77
Income From Investment
Operations
Net investment income(b)(c) .36 .37 .39 .43 .47
Net realized and unrealized
gain on investment
transactions .03 .04 .05 .04 .25
Net increase in net asset value
from operations .39 .41 .44 .47 .72
Less: Dividends and
Distributions
Dividends from net
investment income (.35) (.37) (.41) (.44) (.47)
Distributions in excess of
net investment income -0- -0- -0- (.03) -0-
Total dividends and
distributions (.35) (.37) (.41) (.47) (.47)
Net asset value, end of period $10.13 $10.09 $10.05 $10.02 $10.02
Total Return
Total investment return based
on net asset value(d) 3.94% 4.19% 4.47% 4.77% 7.43%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $47,610 $48,233 $54,062 $53,883 $36,500
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.55% 1.55% 1.55% 1.55% 1.55%
Expenses, before waivers/
reimbursements 1.69% 1.85% 1.85% 1.85% 1.90%
Net investment income,
net of waivers/
reimbursements 3.49% 3.69% 3.89% 4.29% 4.71%
Portfolio turnover rate 23% 33% 23% 34% 32%
See footnote summary on page 159.
_______________________________________________________________________________
152 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Pennsylvania Portfolio
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.48 $10.44 $10.58 $10.42 $9.88
Income From Investment
Operations
Net investment income(b)(c) .44 .48 .50 .51 .52
Net realized and unrealized
gain (loss) on investment
transactions .05 .04 (.14) .18 .55
Net increase in net asset value
from operations .49 .52 .36 .69 1.07
Less: Dividends and
Distributions
Dividends from net
investment income (.44) (.48) (.50) (.51) (.52)
Distributions in excess of
net investment income -0- -0- -0- (.02) (.01)
Total dividends and
distributions (.44) (.48) (.50) (.53) (.53)
Net asset value, end of period $10.53 $10.48 $10.44 $10.58 $10.42
Total Return
Total investment return based
on net asset value(d) 4.75% 5.06% 3.57% 6.88% 11.11%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $78,472 $74,132 $84,053 $99,426 $96,834
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .95% .95% .95% .95% .95%
Expenses, before waivers/
reimbursements 1.03% 1.17% 1.16% 1.13% 1.16%
Net investment income,
net of waivers/
reimbursements 4.19% 4.55% 4.91% 4.98% 5.15%
Portfolio turnover rate 36% 19% 17% 38% 112%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 153
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Pennsylvania Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.48 $10.44 $10.58 $10.41 $9.88
Income From Investment
Operations
Net investment income(b)(c) .37 .40 .44 .45 .45
Net realized and unrealized
gain (loss) on investment
transactions .05 .04 (.15) .18 .54
Net increase in net asset value
from operations .42 .44 .29 .63 .99
Less: Dividends and
Distributions
Dividends from net
investment income (.37) (.40) (.43) (.45) (.45)
Distributions in excess of
net investment income -0- -0- -0- (.01) (.01)
Total dividends and
distributions (.37) (.40) (.43) (.46) (.46)
Net asset value, end of period $10.53 $10.48 $10.44 $10.58 $10.41
Total Return
Total investment return based
on net asset value(d) 4.01% 4.32% 2.84% 6.26% 10.25%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $41,760 $55,552 $68,409 $74,390 $62,038
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.65% 1.65% 1.65% 1.65% 1.65%
Expenses, before waivers/
reimbursements 1.73% 1.88% 1.87% 1.84% 1.86%
Net investment income,
net of waivers/
reimbursements 3.49% 3.85% 4.21% 4.35% 4.36%
Portfolio turnover rate 36% 19% 17% 38% 112%
See footnote summary on page 159.
_______________________________________________________________________________
154 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Pennsylvania Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.48 $10.44 $10.58 $10.41 $9.88
Income From Investment
Operations
Net investment income(b)(c) .37 .40 .44 .45 .45
Net realized and unrealized
gain (loss) on investment
transactions .05 .04 (.15) .18 .54
Net increase in net asset value
from operations .42 .44 .29 .63 .99
Less: Dividends and
Distributions
Dividends from net
investment income (.37) (.40) (.43) (.45) (.45)
Distributions in excess of
net investment income -0- -0- -0- (.01) (.01)
Total dividends and
distributions (.37) (.40) (.43) (.46) (.46)
Net asset value, end of period $10.53 $10.48 $10.44 $10.58 $10.41
Total Return
Total investment return based
on net asset value(d) 4.02% 4.32% 2.84% 6.26% 10.25%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $34,705 $36,168 $42,917 $46,296 $33,334
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.65% 1.65% 1.65% 1.65% 1.65%
Expenses, before waivers/
reimbursements 1.73% 1.87% 1.87% 1.83% 1.86%
Net investment income,
net of waivers/
reimbursements 3.49% 3.85% 4.20% 4.30% 4.42%
Portfolio turnover rate 36% 19% 17% 38% 112%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 155
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Virginia Portfolio
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.77 $10.75 $10.77 $10.54 $10.35
Income From Investment
Operations
Net investment income(b)(c) .49 .52 .52 .52 .54
Net realized and unrealized
gain (loss) on investment
transactions .05 .01 (.03) .25 .20
Net increase in net asset value
from operations .54 .53 .49 .77 .74
Less: Dividends and
Distributions
Dividends from net
investment income (.49) (.51) (.51) (.52) (.54)
Distributions in excess of
net investment income -0- -0- -0- (.02) (.01)
Total dividends and
distributions (.49) (.51) (.51) (.54) (.55)
Net asset value, end of period $10.82 $10.77 $10.75 $10.77 $10.54
Total Return
Total investment return based
on net asset value(d) 5.11% 5.04% 4.66% 7.58% 7.32%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $88,605 $64,089 $71,572 $76,797 $53,306
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .72% .72% .72% .72% .72%
Expenses, before waivers/
reimbursements .99% 1.17% 1.15% 1.15% 1.21%
Net investment income,
net of waivers/
reimbursements 4.48% 4.82% 4.87% 4.95% 5.18%
Portfolio turnover rate 23% 10% 25% 16% 134%
See footnote summary on page 159.
_______________________________________________________________________________
156 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Virginia Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.75 $10.73 $10.75 $10.53 $10.34
Income From Investment
Operations
Net investment income(b)(c) .41 .44 .45 .45 .47
Net realized and unrealized
gain (loss) on investment
transactions .05 .01 (.04) .24 .20
Net increase in net asset value
from operations .46 .45 .41 .69 .67
Less: Dividends and
Distributions
Dividends from net
investment income (.41) (.43) (.43) (.45) (.47)
Distributions in excess of
net investment income -0- -0- -0- (.02) (.01)
Total dividends and
distributions (.41) (.43) (.43) (.47) (.48)
Net asset value, end of period $10.80 $10.75 $10.73 $10.75 $10.53
Total Return
Total investment return based
on net asset value(d) 4.36% 4.32% 3.94% 6.78% 6.62%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $46,489 $65,978 $82,541 $85,842 $69,534
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.42% 1.42% 1.42% 1.42% 1.42%
Expenses, before waivers/
reimbursements 1.70% 1.88% 1.85% 1.86% 1.92%
Net investment income,
net of waivers/
reimbursements 3.81% 4.13% 4.18% 4.27% 4.49%
Portfolio turnover rate 23% 10% 25% 16% 134%
See footnote summary on page 159.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 157
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Virginia Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.74 $10.73 $10.75 $10.52 $10.33
Income From Investment
Operations
Net investment income(b)(c) .41 .44 .45 .45 .47
Net realized and unrealized
gain (loss) on investment
transactions .06 -0- (.04) .25 .20
Net increase in net asset value
from operations .47 .44 .41 .70 .67
Less: Dividends and
Distributions
Dividends from net
investment income (.42) (.43) (.43) (.45) (.47)
Distributions in excess of
net investment income -0- -0- -0- (.02) (.01)
Total dividends and
distributions (.42) (.43) (.43) (.47) (.48)
Net asset value, end of period $10.79 $10.74 $10.73 $10.75 $10.52
Total Return
Total investment return based
on net asset value(d) 4.41% 4.23% 3.94% 6.88% 6.62%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $29,412 $28,654 $33,486 $34,396 $24,116
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.42% 1.42% 1.42% 1.42% 1.42%
Expenses, before waivers/
reimbursements 1.69% 1.87% 1.85% 1.86% 1.92%
Net investment income,
net of waivers/
reimbursements 3.80% 4.13% 4.17% 4.26% 4.48%
Portfolio turnover rate 23% 10% 25% 16% 134%
See footnote summary on page 159.
_______________________________________________________________________________
158 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(a) As of October 1, 2003, the Portfolios have adopted the method of
accounting for interim payments on swap contracts in accordance with Financial
Accounting Standards Board Statement No. 133. These interim payments are
reflected within net realized and unrealized gain (loss) on swap contracts,
however prior to October 1, 2003, these interim payments were reflected within
interest income/expense on the statement of operations. For the year ended
September 30, 2004, the effect of this change to the net investment income and
the net realized and unrealized gain (loss) on investment transactions was less
than $0.01 per share. The effect on the ratio of net investment income to
average net assets was as follows:
Class A Class B Class C
------------ ------------ ------------
Arizona .01% .00% .00%
Florida (.02)% (.02)% (.02)%
Massachusetts (.01)% .00% (.01)%
Michigan .01% .01% .02%
Minnesota .00% .00% .00%
New Jersey .01% .01% .01%
Ohio (.04)% (.03)% (.04)%
Pennsylvania .00% .01% .00%
Virginia (.02)% (.01)% (.02)%
(b) Net of fees waived and expenses reimbursed by the Adviser.
(c) Based on average shares outstanding.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total return does not reflect the deduction of taxes that a shareholder
would pay on Portfolio distributions or the redemption of Portfolio shares.
Total investment return calculated for a period of less than one year is not
annualized.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 159
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees
Alliance Municipal Income Fund II
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of Alliance Municipal Income Fund II
(the "Fund") (comprising, respectively, the Arizona, Florida, Massachusetts,
Michigan, Minnesota, New Jersey, Ohio, Pennsylvania, and Virginia Portfolios)
as of September 30, 2005, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Fund's internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of September 30, 2005 by correspondence
with the custodian and others or by other appropriate auditing procedures where
replies from others were not received. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the Alliance Municipal Income Fund II
at September 30, 2005, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
November 16, 2005
_______________________________________________________________________________
160 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
BOARD OF TRUSTEES
William H. Foulk, Jr.,(1) Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Michael J. Downey(1)
D.James Guzy
Marshall C. Turner, Jr.
OFFICERS(2)
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
(Guy) Robert B. Davidson III, Senior Vice President
Douglas J. Peebles, Senior Vice President
Jeffrey S. Phlegar, Senior Vice President
Michael G. Brooks, Vice President
Fred S. Cohen, Vice President
David M. Dowden, Vice President
Terrance T. Hults, Vice President
William E. Oliver, Vice President
Mark D. Gersten, Treasurer and Chief Financial Officer
Thomas R. Manley, Controller
Emilie D. Wrapp, Secretary
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Independent Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, Texas 78278-6003
Toll-free (800) 227-5672
(1) Member of the Audit Committee, the Governance and Nominating Committee and
the Independent Directors Committee.
(2) The day-to-day management of and investment decisions for the Portfolios
are made by the Municipal Bond Investment Team. The five investment
professionals with the most significant responsibility for the day-to-day
management of the Portfolios' portfolios are: Michael G. Brooks, Fred S. Cohen,
(Guy) Robert B. Davidson III, David M. Dowden and Terrance T. Hults.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 161
MANAGEMENT OF THE FUND
Board of Trustees Information
The business and affairs of the Fund are managed under the direction of the
Board of Trustees. Certain information concerning the Fund's Trustees is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(FIRST YEAR ELECTED*) DURING PAST 5 YEARS TRUSTEE TRUSTEE
- ------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
William H. Foulk, Jr., #+ Investment adviser and an 108 None
2 Sound View Drive independent consultant. He was
Suite 100 formerly Senior Manager of Barrett
Greenwich, CT 06830 Associates, Inc., a registered
Chairman of the Board investment adviser, with which
9-7-1932 he had been associated since
(1998) prior to 2000. He was formerly
Deputy Comptroller and Chief
Investment Officer of the State of
New York and, prior thereto,
Chief Investment Officer of the
New York Bank for Savings.
Ruth Block, #** Formerly an Executive Vice 106 None
500 SE Mizner Blvd. President and Chief Insurance
Boca Raton, FL 33432 Officer of The Equitable Life
11-7-1930 Assurance Society of the United
(1993) States; Chairman and Chief
Executive Officer of Evlico
(insurance); Director of Avon, BP
(oil and gas), Ecolab Incorporated
(specialty chemicals), Tandem
Financial Group and Donaldson,
Lufkin & Jenrette Securities
Corporation; and Governor at
Large, National Association of
Securities Dealers, Inc.
David H. Dievler, # Independent consultant. Until 107 None
P.O. Box 167 December 1994, he was Senior
Spring Lake, NJ 07762 Vice President of Alliance Capital
10-23-1929 Management Corporation
(1993) ("ACMC") responsible for mutual
fund administration. Prior to joining
ACMC in 1984, he was Chief
Financial Officer of Eberstadt Asset
Management since 1968. Prior to
that, he was a Senior Manager at
Price Waterhouse & Co. Member
of American Institute of Certified
Public Accountants since 1953.
_______________________________________________________________________________
162 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(FIRST YEAR ELECTED*) DURING PAST 5 YEARS TRUSTEE TRUSTEE
- ------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
(continued)
John H. Dobkin, # Consultant. Formerly President 106 None
P.O. Box 12 of Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002,
2-19-1942 Senior Advisor from June 1999-
(1998) June 2000 and President of
Historic Hudson Valley (historic
preservation) from December
1989-May 1999. Previously,
Director of the National Academy
of Design and during 1988-1992,
Director and Chairman of the Audit
Committee of ACMC.
Michael J. Downey, # Consultant since January 2004. 81 Asia Pacific Fund,
c/o Alliance Capital Formerly managing partner of Inc., and
Management L.P. Lexington Capital, LLC (investment The Merger Fund
Attn: Philip L. Kirstein advisory firm) from December 1997
1345 Avenue of the until December 2003. Prior thereto,
Americas Chairman and CEO of Prudential
New York, NY 10105 Mutual Fund Management from
1/26/1944 1987 to 1993.
(2005)
D. James Guzy Chairman of the Board of PLX 58 Intel Corporation
P.O. Box 128 Technology (semi-conductors) and (semi-conductors),
Glenbrook, NV 89413 of SRC Computers Inc., with which Cirrus Logic
3-7-1936 he has been associated since prior to Corporation
(2005) 2000. He is also President of the (semi-conductor
Arbor Company (private family equipment),
investments). Novellus
Corporation
(semi-conductor
equipment),
Micro Component
Technology
(semi-conductor
equipment), the
Davis Selected
Advisers Group
of Mutual Funds
and LogicVision
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 163
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(FIRST YEAR ELECTED*) DURING PAST 5 YEARS TRUSTEE TRUSTEE
- ------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
(continued)
Marshall C. Turner, Jr. Principal of Turner Venture 58 Toppan
220 Montgomery Street Associates (venture capital and Photomasks, Inc.,
Penthouse 10 consulting) since prior to 2000. the George Lucas
San Francisco, CA He is Chairman and CEO, DuPont Educational
94104-3402 Photomasks, Inc., Austin Texas, Foundation,
10-10-1941 2003-2005, and President and Chairman of the
(2005) CEOsince company acquired, Board of the
and name changed to Toppan Smithsonian's
Photomasks, Inc. in 2005. (semi- National Museum
conductor manufacturing services). of Natural History
INTERESTED TRUSTEES
Marc O. Mayer++ Executive Vice President of ACMC 81 SCB Partners,
1345 Avenue of the since 2001 and Chairman of the Inc.
Americas, Board of AllianceBernstein SCB, Inc.
New York, NY 10105 Investment Research and
10-2-1957 Management, Inc. ("ABIRM");
(2003) prior thereto, Chief Executive
Officer of Sanford C. Bernstein &
Co., LLC (institutional research
and brokerage arm of Bernstein &
Co. ("SCB & Co.")) and its prede-
cessor since prior to 2000.
* There is no stated term of office for the Fund's Trustees.
** Ms. Block was an "interested person", as defined in the 1940 Act, until
October 21, 2004 by reason of her ownership of equity securities of a
controlling person of the Adviser. Such securities were sold for approximately
$2,400 on October 21, 2004. Ms. Block received shares of The Equitable
Companies Incorporated as part of the demutualization of The Equitable Life
Assurance Society of the United States. Her Equitable shares were subsequently
converted through a corporate action into 116 American Depositary Shares of AXA.
# Member of the Audit Committee,the Governance and Nominating Committee and
Independent Directors Committee.
+ Member of Fair Value Pricing Committee.
++ Mr. Mayer is an "interested trustee", as defined in the 1940 Act, due to
his position as an Executive Vice President of ACMC, the investment adviser.
_______________________________________________________________________________
164 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Officer Information
Certain information concerning the Fund's Officers is listed below.
NAME, ADDRESS* POSITION(S) PRINCIPAL OCCUPATION
AND DATE OF BIRTH HELD WITH FUND DURING PAST 5 YEARS**
- -----------------------------------------------------------------------------------------------------------
Marc O. Mayer President and See biography above.
10-2-1957 Chief Executive Officer
Philip L. Kirstein Senior Vice President Senior Vice President and Independent
5-29-1945 and Independent Compliance Officer of the Alliance-
Compliance Officer Bernstein Funds, with which he has
been associated since October 2004.
Prior thereto, he was Of Counsel to
Kirkpatrick & Lockhart, LLP from
October 2003 to October 2004, and
General Counsel of Merrill Lynch
Investment Managers, L.P. since prior
to 2000 until March 2003.
(Guy) Robert B. Senior Vice President Senior Vice President of ACMC,** with
Davidson III which he has been associated since
4-8-1961 prior to 2000.
Douglas J. Peebles Senior Vice President Executive Vice President of ACMC,**
8-10-1965 with which he has been associated
since prior to 2000.
Jeffrey S. Phlegar Senior Vice President Executive Vice President of ACMC,**
6-28-1966 with which he has been associated
since prior to 2000.
Michael G. Brooks Vice President Senior Vice President and Senior
6-18-1948 Portfolio Manager of ACMC,** with
which he has been associated since
October 2000. Prior thereto, he was a
Vice President and a Senior Portfolio
Manager with Bernstein since prior to
2000.
Fred S. Cohen Vice President Senior Vice President of ACMC,** with
4-16-1958 which he has been associated since
prior to 2000.
David M. Dowden Vice President Senior Vice President of ACMC,** with
11-21-1965 which he has been associated since
prior to 2000.
Terrance T. Hults Vice President Senior Vice President of ACMC,** with
5-17-1966 which he has been associated since
prior to 2000.
William E. Oliver Vice President Senior Vice President of ACMC,** with
9-21-1949 which he has been associated since
prior to 2000.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 165
NAME, ADDRESS* POSITION(S) PRINCIPAL OCCUPATION
AND DATEOFBIRTH HELD WITH FUND DURING PAST 5 YEARS**
- -----------------------------------------------------------------------------------------------------------
Mark D. Gersten Treasurer and Chief Senior Vice President of Alliance
10-4-1950 Financial Officer Global Investor Services, Inc.
("AGIS"),** and Vice President of
ABIRM** with which he has been
associated since prior to 2000.
Thomas R. Manley Controller Vice President of AGIS,** with which
8-3-1951 he has been associated since prior to
2000.
Emilie D. Wrapp Secretary Senior Vice President, Assistant
11-13-1955 General Counsel and Assistant
Secretary of ABIRM,** with which she
has been associated since prior to
2000.
* The address for each of the Fund's Officers is 1345 Avenue of the Americas,
New York, NY 10105.
** ACMC, ABIRM, AGIS and SCB & Co. are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Trustees and Officers and is available without
charge upon request. Contact your financial representative or Alliance Capital
at 1-800-227-4618 for a free prospectus or SAI.
_______________________________________________________________________________
166 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Information Regarding the Review and Approval of the Fund's Advisory Agreement
In this disclosure, the term "Fund" refers to AllianceBernstein Municipal
Income Fund II and the term "Portfolio" refers to the Arizona Portfolio,
Florida Portfolio, Massachusetts Portfolio, Michigan Portfolio, Minnesota
Portfolio, New Jersey Portfolio, Ohio Portfolio, Pennsylvania Portfolio and
Virginia Portfolio, as appropriate (each, a "Portfolio" and together, the
"Portfolios"). There is a single advisory agreement between the Adviser and the
Fund that relates to all nine Portfolios.
The Fund's disinterested trustees (the "trustees") unanimously approved the
continuance of the Advisory Agreement between the Fund and the Adviser in
respect of each Portfolio at a meeting held on September 14 and 16, 2005.
In preparation for the meeting, the trustees had requested from the Adviser and
evaluated extensive materials, including performance and expense information
for other investment companies with similar investment objectives derived from
data compiled by Lipper Inc. ("Lipper"), which is not affiliated with the
Adviser. The trustees also reviewed an independent evaluation from the Fund's
Senior Officer (who is also the Fund's Independent Compliance Officer) of the
reasonableness of the advisory fees in the Advisory Agreement in respect of
each Portfolio (as contemplated by the Assurance of Discontinuance between the
Adviser and the New York Attorney General) wherein the Senior Officer concluded
that such fees were reasonable. In addition, the trustees received a
presentation from the Adviser and had an opportunity to ask representatives of
the Adviser various questions relevant to the proposed approvals. The trustees
noted that the Senior Officer's evaluation considered the following factors in
respect of each Portfolio: management fees charged to institutional and other
clients of the Adviser for like services; management fees charged by other
mutual fund companies for like services; cost to the Adviser and its affiliates
of supplying services pursuant to the Advisory Agreement, excluding any
intra-corporate profit; profit margins of the Adviser and its affiliates from
supplying such services; possible economies of scale as the Portfolio grows
larger; and nature and quality of the Adviser's services including the
performance of the Portfolio.
Prior to voting, the trustees reviewed the proposed continuance of the Advisory
Agreement with management and with experienced counsel who are independent of
the Adviser and received a memorandum from such counsel discussing the legal
standards for their consideration of the proposed continuances. The trustees
also discussed the proposed continuances in four private sessions at which only
the trustees, their independent counsel and the Fund's Independent Compliance
Officer were present. In reaching their determinations relating to continuance
of the Advisory Agreement in respect of each Portfolio, the trustees considered
all factors they believed relevant, including the following:
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 167
1. information comparing the performance of each of the Portfolios to other
investment companies with similar investment objectives and to an index;
2. the nature, extent and quality of investment, compliance, administrative
and other services rendered by the Adviser;
3. payments received by the Adviser from all sources in respect of each
Portfolio and all investment companies in the AllianceBernstein Funds complex;
4. the costs borne by, and profitability of, the Adviser and its affiliates in
providing services to each Portfolio and to all investment companies in the
AllianceBernstein Funds complex;
5. comparative fee and expense data for each Portfolio and other investment
companies with similar investment objectives;
6. the extent to which economies of scale would be realized to the extent the
Portfolio grows and whether fee levels reflect any economies of scale for the
benefit of investors;
7. the Adviser's policies and practices regarding allocation of portfolio
transactions of the Portfolios, including the extent to which the Adviser
benefits from soft dollar arrangements;
8. information about "revenue sharing" arrangements that the Adviser has
entered into in respect of the Portfolios;
9. portfolio turnover rates for each Portfolio compared to other investment
companies with similar investment objectives;
10. fall-out benefits which the Adviser and its affiliates receive from their
relationships with the Portfolios;
11. the Adviser's representation that it does not advise other clients with
substantially similar investment objectives and strategies as the Portfolios;
12. the Senior Officer's evaluation of the reasonableness of the fees payable
to the Adviser in the Advisory Agreement;
13. the professional experience and qualifications of each Portfolio's
portfolio management team and other senior personnel of the Adviser; and
14. the terms of the Advisory Agreement.
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168 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
The trustees also considered their knowledge of the nature and quality of the
services provided by the Adviser to the Portfolios gained from their experience
as trustees or directors of most of the funds advised by the Adviser, their
overall confidence in the Adviser's integrity and competence they have gained
from that experience and the Adviser's responsiveness to concerns raised by
them in the past, including the Adviser's willingness to consider and implement
organizational and operational changes designed to improve investment results
and the services provided to the AllianceBernstein Funds.
In their deliberations, the trustees did not identify any particular
information that was all-important or controlling, and each director attributed
different weights to the various factors. The trustees evaluated all
information available to them on a fund-by-fund basis, and their determinations
were made separately in respect of each Portfolio.
The trustees determined that the overall arrangements between each Portfolio
and the Adviser, as provided in the Advisory Agreement in respect of that
Portfolio, were fair and reasonable in light of the services performed,
expenses incurred and such other matters as the trustees considered relevant in
the exercise of their business judgment.
The material factors and conclusions that formed the basis for the trustees
reaching their determinations to approve the continuance of the Advisory
Agreement in respect of each Portfolio (including their determinations that the
Adviser should continue to be the investment adviser for each Portfolio, and
that the fees payable to the Adviser pursuant to the Advisory Agreement are
appropriate) were separately discussed by the trustees.
Nature, extent and quality of services provided by the Adviser
The trustees noted that, under the Advisory Agreement, the Adviser, subject to
the control of the trustees, administers each Portfolio's business and other
affairs. The Adviser manages the investment of the assets of each Portfolio,
including making purchases and sales of portfolio securities consistent with
the Portfolio's investment objective and policies. Under the Advisory
Agreement, the Adviser also provides each Portfolio with such office space,
administrative and other services (exclusive of, and in addition to, any such
services provided by any others retained by the Portfolio) and executive and
other personnel as are necessary for the Portfolio's operations. The Adviser
pays all of the compensation of trustees of the Fund who are affiliated persons
of the Adviser and of the officers of the Portfolio.
The trustees also considered that the Advisory Agreement in respect of each
Portfolio provides that the Portfolio will reimburse the Adviser for the cost
of certain clerical, accounting, administrative and other services provided at
the Portfolio's request by employees of the Adviser or its affiliates. Requests
for these
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 169
"at no more than cost" reimbursements are approved by the trustees on a
quarterly basis and (to the extent requested and paid) result in a higher rate
of total compensation from the Portfolios to the Adviser than the fee rates
stated in the Portfolio's Advisory Agreement.
The trustees considered the scope and quality of services provided by the
Adviser under the Advisory Agreement and noted that the scope of services
provided by advisers of funds had expanded over time as a result of regulatory
and other developments. The trustees noted, for example, that the Adviser is
responsible for maintaining and monitoring its own and, to varying degrees, the
Portfolios' compliance programs, and that these compliance programs have
recently been refined and enhanced in light of new regulatory requirements. The
trustees considered the quality of the in-house investment research
capabilities of the Adviser and the other resources it has dedicated to
performing services for the Portfolios. The quality of administrative and other
services, including the Adviser's role in coordinating the activities of the
Portfolios' other service providers, also were considered. The trustees also
considered the Adviser's response to recent regulatory compliance issues
affecting a number of the investment companies in the AllianceBernstein Funds
complex. The trustees concluded that, overall, they were satisfied with the
nature, extent and quality of services provided to each of the Portfolios under
the Advisory Agreement.
Costs of Services Provided and Profitability to the Adviser
The trustees reviewed a schedule of the revenues, expenses and related notes
indicating the profitability of each Portfolio to the Adviser for calendar
years 2003 and 2004. The trustees reviewed the assumptions and methods of
allocation used by the Adviser in preparing fund-specific profitability data,
and noted the Adviser's representation to them that it believed that the
methods of allocation used in preparing the profitability information were
reasonable and appropriate and that the Adviser had previously discussed with
the trustees that there is no generally accepted allocation methodology for
information of this type. The trustees also noted that the methodology for
preparing fund-by-fund profitability information was being reviewed and that it
was expected that an updated methodology would be used in 2005, and that it
would differ in various respects from the methodology used in 2004 and in prior
years.
The trustees recognized that it is difficult to make comparisons of
profitability from fund advisory contracts because comparative information is
not generally publicly available and is affected by numerous factors, including
the structure of the particular adviser, the types of funds it manages, its
business mix, numerous assumptions regarding allocations and the adviser's
capital structure and cost of capital. In considering profitability
information, the trustees considered the effect of fall-out benefits on the
Adviser's expenses, as well as the "revenue sharing" arrangements the Adviser
has entered into with certain entities that distribute shares of the
Portfolios. The trustees focused on the profitability of the
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170 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Adviser's relationships with the Portfolios before taxes and distribution
expenses. The trustees recognized that the Adviser should generally be entitled
to earn a reasonable level of profits for the services it provides to each
Portfolio and, based on their review, concluded that they were satisfied that
the Adviser's level of profitability from its relationship with each Portfolio
was not excessive.
Fall-Out Benefits
The trustees considered that the Adviser benefits from soft dollar arrangements
whereby it receives brokerage and research services from many of the brokers
and dealers that execute purchases and sales of securities on behalf of its
clients on an agency basis. The trustees noted that since the Portfolios do not
engage in brokerage transactions, the Adviser does not receive soft dollar
benefits in respect of portfolio transactions of the Portfolios.
The trustees also considered that the Distributor, which is a wholly-owned
subsidiary of the Adviser: receives 12b-1 fees from each Portfolio in respect
of classes of shares of the Portfolio that are subject to the Fund's 12b-1
plans; retains a portion of the 12b-1 fees from the Portfolio; and receives all
or a portion of the sales charges on sales or redemptions of certain classes of
shares. The trustees also noted that certain affiliates of the Adviser
distribute shares of the Portfolios and receive compensation in that connection
and that a subsidiary of the Adviser provides transfer agency services to the
Portfolios and receives compensation from the Portfolios for such services.
The trustees recognized that the Adviser's profitability would be somewhat
lower if it did not receive research for soft dollars or if the Adviser's
affiliates did not receive the benefits described above. The trustees believe
that the Adviser derives reputational and other benefits from its association
with the Portfolios.
Investment Results
In addition to the information reviewed by the trustees in connection with the
meeting, the trustees receive detailed comparative performance information for
each Portfolio at each regular Board meeting during the year. At the meeting,
the trustees reviewed information from a report prepared by Lipper showing
performance for Class A shares of each Portfolio as compared to a group of
funds in its Lipper category selected by Lipper (the "Performance Group") and
as compared to a universe of funds in its Lipper category selected by Lipper
(the "Performance Universe"). The trustees also reviewed information prepared
by the Adviser showing performance of the Class A Shares of each Portfolio as
compared to an index.
Arizona Portfolio
The trustees reviewed information showing performance for Class A shares of the
Arizona Portfolio as compared to a Performance Group of 9 to 8 funds (depending
on the year) in its Lipper category selected by Lipper and as com-
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 171
pared to a Performance Universe of 11 to 9 funds (depending on the year) in its
Lipper category selected by Lipper for periods ended May 31, 2005 over the 1-,
3-, 5- and 10-year periods, and as compared to the Lehman Brothers Municipal
Bond Index for periods ending May 31, 2005 over the year to date, 1-, 3-, 5-
and 10-year and since inception periods (June 1994 inception). The trustees
noted that in the Performance Group and Performance Universe comparisons, the
Arizona Portfolio was in the first quintile in all periods reviewed. The
comparative information showed that the Arizona Portfolio outperformed the
Index in all periods reviewed except in the 5-year period when it
underperformed the Index. The trustees concluded that the Arizona Portfolio's
relative performance over time was highly satisfactory.
Florida Portfolio
The trustees reviewed information showing performance for Class A shares of the
Florida Portfolio as compared to a Performance Group of 10 funds in its Lipper
category selected by Lipper and as compared to a Performance Universe of 17
funds in its Lipper category selected by Lipper for periods ended May 31, 2005
over the 1-, 3-, 5- and 10-year periods, and as compared to the Lehman Brothers
Municipal Bond Index for periods ending May 31, 2005 over the year to date, 1-,
3-, 5- and 10-year and since inception periods (June 1993 inception). The
trustees noted that in the Performance Group and Performance Universe
comparisons, the Florida Portfolio was in the first quintile in all periods
reviewed except in the 5-year period when it was in the second quintile in the
Performance Group comparison. The comparative information showed that the
Florida Portfolio outperformed the Index in all periods reviewed except in the
since inception period when it underperformed the Index. Based on their review,
the trustees concluded that the Florida Portfolio's relative performance over
time was highly satisfactory.
Massachusetts Portfolio
The trustees reviewed information showing performance for Class A shares of the
Massachusetts Portfolio as compared to a Performance Group of 13 funds in its
Lipper category selected by Lipper and as compared to a Performance Universe of
17 to 16 funds (depending on the year) in its Lipper category selected by
Lipper for periods ended May 31, 2005 over the 1-, 3-, 5- and 10-year periods,
and as compared to the Lehman Brothers Municipal Bond Index for periods ending
May 31, 2005 over the year to date, 1-, 3-, 5- and 10-year and since inception
periods (March 1994 inception). The trustees noted that in the Performance
Group comparison the Massachusetts Portfolio was in the first quintile in the
1- and 10-year periods, in the fourth quintile in the 3-year period and in the
third quintile in the 5-year period, and in the Performance Universe comparison
was in the first quintile in the 1- and 10-year periods and in the third
quintile in the 3- and 5-year periods. The comparative information showed that
the Massachusetts Portfolio outperformed the Index in all periods reviewed
except in the 3- and 5-year periods when it underperformed the Index. Based on
_______________________________________________________________________________
172 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
their review, the trustees concluded that the Massachusetts Portfolio's
relative performance over time was satisfactory.
Michigan Portfolio
The trustees reviewed information showing performance for Class A shares of the
Michigan Portfolio as compared to a Performance Group of 9 funds in its Lipper
category selected by Lipper and as compared to a Performance Universe of 13
funds in its Lipper category selected by Lipper for periods ended May 31, 2005
over the 1-, 3-, 5- and 10-year periods, and as compared to the Lehman Brothers
Municipal Bond Index for periods ending May 31, 2005 over the year to date, 1-,
3-, 5- and 10-year and since inception periods (February 1994 inception). The
trustees noted that in the Performance Group and Performance Universe
comparisons, the Michigan Portfolio was in the first quintile in all periods
reviewed. The comparative information showed that the Michigan Portfolio
outperformed the Index in all periods reviewed except in the 3-year period when
it underperformed the Index. Based on their review, the trustees concluded that
the Michigan Portfolio's relative performance over time was highly satisfactory.
Minnesota Portfolio
The trustees reviewed information showing performance for Class A shares of the
Minnesota Portfolio as compared to a Performance Group of 10 to 9 funds
(depending on the year) in its Lipper category selected by Lipper and as
compared to a Performance Universe of 18 to 16 funds (depending on the year) in
its Lipper category selected by Lipper for periods ended May 31, 2005 over the
1-, 3-, 5- and 10-year periods, and as compared to the Lehman Brothers
Municipal Bond Index for periods ending May 31, 2005 over the year to date
("YTD"), 1-, 3-, 5- and 10-year and since inception periods (June 1993
inception). The trustees noted that in the Performance Group and Performance
Universe comparisons the Minnesota Portfolio was in the first quintile in the
1- and 10-year periods and in the second quintile in the 3- and 5-year periods.
The comparative information showed that the Minnesota Portfolio outperformed
the Index in the YTD and 1-year periods and underperformed the Index in all
other periods reviewed. Based on their review, the trustees concluded that the
Minnesota Portfolio's relative performance over time was satisfactory.
New Jersey Portfolio
The trustees reviewed information showing performance for Class A shares of the
New Jersey Portfolio as compared to a Performance Group of 10 to 9 funds
(depending on the year) in its Lipper category selected by Lipper and as
compared to a Performance Universe of 18 to 16 funds (depending on the year) in
its Lipper category selected by Lipper for periods ended May 31, 2005 over the
1-, 3-, 5- and 10-year periods, and as compared to the Lehman Brothers
Municipal Bond Index for periods ending May 31, 2005 over the year to date
("YTD"), 1-, 3-, 5- and 10-year and since inception periods (June 1993 incep-
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 173
tion). The trustees noted that in the Performance Group comparison the New
Jersey Portfolio was in the second quintile in the 1- and 10-year periods and
in the fourth quintile in the 3- and 5-year periods, and in the Performance
Universe comparison was in the second quintile in the 1- and 10-year periods,
in the third quintile in the 3-year period and in the fifth quintile in the
5-year period. The comparative information showed that the New Jersey Portfolio
outperformed the Index in the YTD and 1-year periods and underperformed the
Index in all other periods reviewed. Based on their review, the trustees
concluded that the New Jersey Portfolio's relative performance over time was
satisfactory.
Ohio Portfolio
The trustees reviewed information showing performance for Class A shares of the
Ohio Portfolio as compared to a Performance Group of 10 funds in its Lipper
category selected by Lipper and as compared to a Performance Universe of 14 to
13 funds (depending on the year) in its Lipper category selected by Lipper for
periods ended May 31, 2005 over the 1-, 3-, 5- and 10-year periods, and as
compared to the Lehman Brothers Municipal Bond Index for periods ending May 31,
2005 over the year to date ("YTD"), 1-, 3-, 5- and 10-year and since inception
periods (June 1993 inception). The trustees noted that in the Performance Group
comparison the Ohio Portfolio was in the first quintile in the 10-year period
and in the second quintile in all other periods reviewed, and in the
Performance Universe comparison was in the first quintile in the 1- and 10-year
periods and in the second quintile in the 3- and 5-year periods. The
comparative information showed that the Ohio Portfolio outperformed the Index
in the YTD and 1-year periods and underperformed the Index in all other periods
reviewed. Based on their review, the trustees concluded that the Ohio
Portfolio's relative performance over time was satisfactory.
Pennsylvania Portfolio
The trustees reviewed information showing performance for Class A shares of the
Pennsylvania Portfolio as compared to a Performance Group of 12 funds in its
Lipper category selected by Lipper and as compared to a Performance Universe of
21 to 20 funds (depending on the year) in its Lipper category selected by
Lipper for periods ended May 31, 2005 over the 1-, 3-, 5- and 10-year periods,
and as compared to the Lehman Brothers Municipal Bond Index for periods ending
May 31, 2005 over the year to date ("YTD"), 1-, 3-, 5- and 10-year and since
inception periods (June 1993 inception). The trustees noted that in the
Performance Group comparison, the Pennsylvania Portfolio was in the third
quintile in the 1- and 3-year periods, second quintile in the 5-year period and
first quintile in the 10-year period, and in the Performance Universe
comparison was in the second quintile in the 1- and 3-year periods and first
quintile in the 5- and 10-year periods. The comparative information showed that
the Pennsylvania Portfolio outperformed the Index in the YTD and 1-year periods
and underperformed the Index in all other periods reviewed. Based on their
review, the trustees concluded that the Pennsylvania Portfolio's relative
performance over time was satisfactory.
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174 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia Portfolio
The trustees reviewed information showing performance for Class A shares of the
Virginia Portfolio as compared to a Performance Group of 8 funds in its Lipper
category selected by Lipper and as compared to a Performance Universe of 9
funds in its Lipper category selected by Lipper for periods ended May 31, 2005
over the 1-, 3-, 5- and 10-year periods, and compared to the Lehman Brothers
Municipal Bond Index for periods ending May 31, 2005 over the year to date, 1-,
3-, 5- and 10-year and since inception periods (April 1994 inception). The
trustees noted that in the Performance Group and Performance Universe
comparisons, the Virginia Portfolio was in the second quintile in the 1-year
period and in the first quintile in all other periods reviewed. The comparative
information showed that the Virginia Portfolio outperformed the Index in all
periods reviewed except in the 5-year period when it underperformed the Index.
Based on their review, the trustees concluded that the Virginia Portfolio's
relative performance over time was highly satisfactory.
Advisory Fees and Other Expenses
The trustees considered the advisory fee rate paid by each Portfolio to the
Adviser and information prepared by Lipper concerning fee rates paid by other
funds in the same Lipper category as the Portfolio at a common asset level. The
trustees recognized that it is difficult to make comparisons of advisory fees
because there are variations in the services that are included in the fees paid
by other funds.
The trustees reviewed information in the Adviser's Form ADV and noted that it
charged institutional clients lower fees for advising comparably sized accounts
using strategies that differ from those of the Portfolios but which involve
investments in fixed income municipal securities. They had previously received
an oral presentation from the Adviser that supplemented the information in the
Form ADV.
The Adviser reviewed with the trustees the significant differences in the scope
of services it provides to institutional clients and to the Portfolios. For
example, the Advisory Agreement requires the Adviser to provide, in addition to
investment advice, office facilities and officers (including officers to
provide required certifications). The Adviser also coordinates the provision of
services to the Portfolios by non-affiliated service providers and is
responsible for the compensation of the Fund's Independent Compliance Officer
and certain related expenses. The provision of these non-advisory services
involves costs and exposure to liability. The Adviser explained that many of
these services normally are not provided to non-investment company clients, and
that fees charged to the Portfolios reflect the costs and risks of the
additional obligations. The Adviser also noted that since the Portfolios are
constantly issuing and redeeming their shares, they are more difficult to
manage than an institutional account, where the assets are relatively
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 175
stable. In light of these facts, the trustees did not place significant weight
on these fee comparisons.
The trustees also considered the total expense ratio of the Class A shares of
each Portfolio in comparison to the fees and expenses of funds within two
comparison groups of funds in the same Lipper category created by Lipper: an
Expense Group and an Expense Universe. Lipper described an Expense Group as a
representative sample of comparable funds and an Expense Universe as a broader
group, consisting of all funds in the Portfolio's investment
classification/objective with a similar load type as the Portfolio. The Class A
expense ratio of each Portfolio was based on the Portfolio's latest fiscal year
expense ratio. The trustees recognized that the expense ratio information for
each Portfolio potentially reflected on the Adviser's provision of services, as
the Adviser is responsible for coordinating services provided to each Portfolio
by others. The trustees noted that it was likely that the expense ratios of
some funds in each Portfolio's Lipper category also were lowered by waivers or
reimbursements by those funds' investment advisers, which in some cases were
voluntary and perhaps temporary.
Arizona Portfolio
The information reviewed by the trustees showed that the Arizona Portfolio's at
approximate current size contractual effective fee rate of 45 basis points was
materially lower than the Expense Group median. The trustees noted that the
latest fiscal year administrative expense reimbursement by the Arizona
Portfolio pursuant to the Advisory Agreement was 4 basis points and that as a
result the total compensation received by the Adviser from the Arizona
Portfolio pursuant to the Advisory Agreement was only slightly lower than the
Expense Group median. The trustees also noted that the Arizona Portfolio's
total expense ratio, which had been capped by the Adviser, was the same as the
medians for the Expense Group and Expense Universe. The trustees concluded that
the Arizona Portfolio's expense ratio was satisfactory.
Florida Portfolio
The information reviewed by the trustees showed that the Florida Portfolio's at
approximate current size contractual effective fee rate of 45 basis points was
materially lower than the Expense Group median. The trustees noted that the
latest fiscal year administrative expense reimbursement by the Florida
Portfolio pursuant to the Advisory Agreement was 3 basis points. The trustees
also noted that the Florida Portfolio's total expense ratio, which had been
capped by the Adviser, was somewhat lower than the medians for the Expense
Group and Expense Universe. The trustees concluded that the Florida Portfolio's
expense ratio was satisfactory.
Massachusetts Portfolio
The information reviewed by the trustees showed that the Massachusetts
Portfolio's at approximate current size contractual effective fee rate of 45
basis
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176 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
points was materially lower than the Expense Group median. The trustees noted
that the latest fiscal year administrative expense reimbursement by the
Massachusetts Portfolio pursuant to the Advisory Agreement was 5 basis points
and that as a result the total compensation received by the Adviser from the
Massachusetts Portfolio pursuant to the Advisory Agreement was similar to the
Expense Group median. The trustees also noted that the Massachusetts
Portfolio's total expense ratio, which had been capped by the Adviser, was
somewhat lower than the medians for the Expense Group and Expense Universe. The
trustees concluded that the Massachusetts Portfolio's expense ratio was
satisfactory.
Michigan Portfolio
The information reviewed by the trustees showed that the Michigan Portfolio's
at approximate current size contractual effective fee rate of 45 basis points
was materially lower than the Expense Group median. The trustees noted that in
the Michigan Portfolio's latest fiscal year, the administrative expense
reimbursement of 5 basis points had been waived by the Adviser. The trustees
also noted that the Michigan Portfolio's total expense ratio, which had been
capped by the Adviser, was materially higher than the medians for the Expense
Group and Expense Universe. The trustees also noted that the Adviser had
recently reviewed with them steps being taken that are intended to reduce
expenses of the AllianceBernstein Funds. They concluded that the Michigan
Portfolio's expense ratio was acceptable.
Minnesota Portfolio
The information reviewed by the trustees showed that the Minnesota Portfolio's
at approximate current size contractual effective fee rate of 45 basis points
was materially lower than the Expense Group median. The trustees noted that in
the Minnesota Portfolio's latest fiscal year, the administrative expense
reimbursement of 8 basis points had been waived by the Adviser. The trustees
also noted that the Minnesota Portfolio's total expense ratio, which had been
capped by the Adviser, was slightly higher than the medians for the Expense
Group and the Expense Universe. The trustees concluded that the Minnesota
Portfolio's expense ratio was satisfactory.
New Jersey Portfolio
The information reviewed by the trustees showed that the New Jersey Portfolio's
at approximate current size contractual effective fee rate of 45 basis points
was materially lower than the Expense Group median. The trustees noted that the
latest fiscal year administrative expense reimbursement by the New Jersey
Portfolio pursuant to the Advisory Agreement was 4 basis points and that as a
result the total compensation received by the Adviser from the New Jersey
Portfolio pursuant to the Advisory Agreement was only somewhat lower than the
Expense Group median. The trustees also noted that the New Jersey Portfolio's
total expense ratio, which had been capped by the Adviser, was slightly lower
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 177
than the median for the Expense Group and somewhat lower than the median for
the Expense Universe. The trustees concluded that the New Jersey Portfolio's
expense ratio was satisfactory.
Ohio Portfolio
The information reviewed by the trustees showed that the Ohio Portfolio's at
approximate current size contractual effective fee rate of 45 basis points was
materially lower than the Expense Group median. The trustees noted that the
latest fiscal year administrative expense reimbursement by the Ohio Portfolio
pursuant to the Advisory Agreement was 4 basis points and that as a result the
total compensation received by the Adviser from the Ohio Portfolio pursuant to
the Advisory Agreement was only slightly lower than the Expense Group median.
The trustees also noted that the Ohio Portfolio's total expense ratio, which
had been capped by the Adviser, was slightly lower than the medians for the
Expense Group and Expense Universe. The trustees concluded that the Ohio
Portfolio's expense ratio was satisfactory.
Pennsylvania Portfolio
The information reviewed by the trustees showed that the Pennsylvania
Portfolio's at approximate current size contractual effective fee rate of 45
basis points was materially lower than the Expense Group median. The trustees
noted that the latest fiscal year administrative expense reimbursement by the
Pennsylvania Portfolio pursuant to the Advisory Agreement was 4 basis points
and that as a result the total compensation received by the Adviser from the
Pennsylvania Portfolio pursuant to the Advisory Agreement was only slightly
lower than the Expense Group median. The trustees also noted that the
Pennsylvania Portfolio's total expense ratio, which had been capped by the
Adviser, was slightly higher than the median for the Expense Group and somewhat
above the median for the Expense Universe. The trustees concluded that the
Pennsylvania Portfolio's expense ratio was satisfactory.
Virginia Portfolio
The information reviewed by the trustees showed that the Virginia Portfolio's
at approximate current size contractual effective fee rate of 45 basis points
was somewhat lower than the Expense Group median. The trustees noted that in
the Virginia Portfolio's latest fiscal year, the administrative expense
reimbursement of 5 basis points had been waived by the Adviser. The trustees
also noted that the Virginia Portfolio's total expense ratio, which had been
capped by the Adviser, was materially lower than the medians for the Expense
Group and Expense Universe. The trustees concluded that the Virginia
Portfolio's expense ratio was satisfactory.
Economies of Scale
The trustees noted that the advisory fee schedule for each Portfolio contains
breakpoints so that, if assets were to increase over the breakpoint levels, the
fee
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178 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
rates would be reduced on the incremental assets. The trustees also considered
a presentation by an independent consultant discussing economies of scale
issues in the mutual fund industry. The trustees believe that economies of
scale are realized (if at all) by the Adviser across a variety of products and
services, and not only in respect of a single fund. The trustees noted that
there is no uniform methodology for establishing breakpoints that give effect
to fund-specific services provided by the Adviser and to the economies of scale
that the Adviser may realize in its overall mutual fund business or those
components of it which directly or indirectly affect a Portfolio's operations.
The trustees observed that in the mutual fund industry as a whole, as well as
among funds similar to the Portfolios, there is no uniformity or pattern in the
fees and asset levels at which breakpoints (if any) apply. Depending on the age
and size of a particular fund and its adviser's cost structure, different
conclusions can be drawn as to whether there are economies of scale to be
realized at any particular level of assets, notwithstanding the intuitive
conclusion that such economies exist, or will be realized at some level of
total assets. Moreover, because different advisers have different cost
structures and service models, it is difficult to draw meaningful conclusions
from the comparison of a fund's advisory fee breakpoints with those of
comparable funds. The trustees also noted that the advisory agreements for many
funds do not have breakpoints at all. Having taken these factors into account,
the trustees concluded that each Portfolio's breakpoint arrangements would
result in a sharing of economies of scale in the event of a very significant
increase in the Portfolio's net assets.
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 179
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
- --------------------------------------------
Blended Style Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund*
Small Cap Growth Portfolio
Global & International
Global Health Care Fund*
Global Research Growth Fund
Global Technology Fund*
Greater China '97 Fund
International Growth Fund*
International Research Growth Fund*
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund*
Growth & Income Fund
Real Estate Investment Fund
Small/Mid-Cap Value Fund*
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
- --------------------------------------------
Taxable Bond Funds
- --------------------------------------------
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
Short Duration Portfolio
U.S. Government Portfolio
- --------------------------------------------
Municipal Bond Funds
- --------------------------------------------
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
- --------------------------------------------
Intermediate Municipal Bond Funds
- --------------------------------------------
Intermediate California
Intermediate Diversified
Intermediate New York
- --------------------------------------------
Closed-End Funds
- --------------------------------------------
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
We also offer Exchange Reserves,** which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. You should read the prospectus carefully before you invest.
* Prior to December 15, 2004, these Funds were named as follows: Global Health
Care Fund was Health Care Fund; Large Cap Growth Fund was Premier Growth Fund;
Global Technology Fund was Technology Fund; and Focused Growth & Income Fund
was Disciplined Value Fund. Prior to February 1, 2005, Small/Mid-Cap Value Fund
was named Small Cap Value Fund. Prior to May 16, 2005, International Growth
Fund was named Worldwide Privatization Fund and International Research Growth
Fund was named International Premier Growth Fund. On June 24, 2005, All-Asia
Investment Fund merged into International Research GrowthFund. On July 8, 2005,
New Europe Fund merged into International Research Growth Fund.
** An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
_______________________________________________________________________________
180 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS.
SUMMARY OF SENIOR OFFICER'S EVALUATION OF INVESTMENT ADVISORY AGREEMENT (1)
The following is a summary of the evaluation of the investment advisory
agreement between Alliance Capital Management L.P. (the "Adviser") and
AllianceBernstein Municipal Income Fund II (the "Trust") on behalf of Arizona
Portfolio, Florida Portfolio, Massachusetts Portfolio, Michigan Portfolio,
Minnesota Portfolio, New Jersey Portfolio, Ohio Portfolio, Pennsylvania
Portfolio and Virginia Portfolio (each a "Fund" and collectively the "Funds"),
prepared by Philip L. Kirstein, the Senior Officer, for the independent
Trustees of the Funds, as required by the Assurance of Discontinuance between
the New York State Attorney General and the Adviser. The Senior Officer's
evaluation of the investment advisory agreement is not meant to diminish the
responsibility or authority of the Board of Trustees to perform its duties
pursuant to Section 15 of the Investment Company Act of 1940 (the "40 Act") and
applicable state law. The purpose of the summary is to provide shareholders
with a synopsis of the independent evaluation of the reasonableness of the
advisory fees which was provided to the independent directors in connection
with their review of the proposed continuance of the investment advisory
agreement. The Senior Officer's evaluation considered the following factors:
1. Management fees charged to institutional and other clients of the Adviser
for like services.
2. Management fees charged by other mutual fund companies for like services.
3. Costs to the Adviser and its affiliates of supplying services pursuant to
the advisory agreements, excluding any intra-corporate profit.
4. Profit margins of the Adviser and its affiliates from supplying such
services.
5. Possible economies of scale as the Funds grow larger.
6. Nature and quality of the Adviser's services including the performance of
the Funds.
(1) It should be noted that the information in the fee summary was completed
on September 2, 2005 and presented to the Board of Trustees on September 14,
2005 in accordance with the Assurance of Discontinuance between the New York
State Attorney General and the Adviser. It also should be noted that references
in the fee summary pertaining to performance and expense ratios refer to Class
A shares of the Funds.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 181
FUNDS ADVISORY FEES, EXPENSE REIMBURSEMENTS, CAPS & RATIOS
The table below describes the Funds' advisory fees pursuant to the Investment
Advisory Agreement. This is the fee schedule the Adviser implemented in January
2004 as a result of the settlement with the New York State Attorney General. (2)
Advisory Fee Based on % of
Fund Average Daily Net Assets
- -------------------------------------------------------------------------------
Arizona Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Florida Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Massachusetts Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Michigan Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Minnesota Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
New Jersey Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Ohio Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Pennsylvania Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Virginia Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
(2) The advisory fee schedule implemented in January 2004 contemplates eight
categories of the AllianceBernstein Mutual Funds with all AllianceBernstein
Funds in each category having the same advisory fee schedule.
_______________________________________________________________________________
182 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
The Adviser is reimbursed as specified in the Investment Advisory Agreement for
certain clerical, legal, accounting, administrative and other services provided
to the Funds as indicated below:
As a % of
Fund Amount average daily net assets
- -------------------------------------------------------------------------------
Arizona Portfolio $80,750 0.04
Florida Portfolio $80,750 0.03
Massachusetts Portfolio $80,750 0.05
Michigan Portfolio (3) $80,750 0.05
Minnesota Portfolio (3) $80,750 0.08
New Jersey Portfolio $80,750 0.04
Ohio Portfolio $80,750 0.04
Pennsylvania Portfolio $80,750 0.04
Virginia Portfolio (4) $80,750 0.05
The Adviser has agreed to waive that portion of its management fees and/or
reimburse each Fund for that portion of its total operating expenses to the
degree necessary to limit each Fund's expense ratio to the amounts set forth
below for each Fund's current fiscal year. The waiver agreement is terminable
by the Adviser at the end of the Funds' fiscal year upon at least 60 days
written notice.
Expense Cap Gross
Pursuant to Expense Expense
Fund Limitation Undertaking Ratio(5) Fiscal Year End
- -------------------------------------------------------------------------------
Arizona Portfolio Class A 0.78% 0.97% September 30
Class B 1.48% 1.67%
Class C 1.48% 1.67%
Florida Portfolio Class A 0.78% 0.96% September 30
Class B 1.48% 1.67%
Class C 1.48% 1.66%
Massachusetts Portfolio Class A 0.82% 1.03% September 30
Class B 1.52% 1.74%
Class C 1.52% 1.73%
Michigan Portfolio Class A 1.01% 1.01% September 30
Class B 1.71% 1.72%
Class C 1.71% 1.71%
Minnesota Portfolio Class A 0.90% 1.02% September 30
Class B 1.60% 1.74%
Class C 1.60% 1.73%
New Jersey Portfolio Class A 0.87% 1.01% September 30
Class B 1.57% 1.71%
Class C 1.57% 1.71%
(3) For the Fund's most recently completed fiscal year, the Adviser waived the
reimbursement amount.
(4) See footnote 3.
(5) These gross expense ratios are calculated from the beginning of the Funds'
current fiscal year through May 31, 2005.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 183
Expense Cap Gross
Pursuant to Expense Expense
Fund Limitation Undertaking Ratio(5) Fiscal Year End
- -------------------------------------------------------------------------------
Ohio Portfolio Class A 0.85% 0.98% September 30
Class B 1.55% 1.68%
Class C 1.55% 1.68%
Pennsylvania Portfolio Class A 0.95% 1.02% September 30
Class B 1.65% 1.73%
Class C 1.65% 1.72%
Virginia Portfolio Class A 0.72% 0.95% September 30
Class B 1.42% 1.66%
Class C 1.42% 1.66%
I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS
The management fees charged to investment companies which the Adviser manages
and sponsors is normally higher than those charged to similar sized
institutional accounts, including pension plans and sub-advised investment
companies. The fee differential reflects, among other things, different
services provided to such clients, and different liabilities assumed. Services
provided by the Adviser to the Funds that are not provided to non-investment
company clients include providing office space and personnel to serve as Fund
Officers, who among other responsibilities make the certifications required
under the Sarbanes-Oxley Act of 2002, and coordinating with and monitoring the
Funds' third party service providers such as Fund counsel, auditors,
custodians, transfer agents and pricing services. The accounting,
administrative, legal and compliance requirements for the Funds are more costly
than those for institutional assets due to the greater complexities and time
required for investment companies, although as previously noted, a portion of
these expenses are reimbursed by the Funds to the Adviser. In addition,
managing the cash flow of an investment company may be more difficult than that
of a stable pool of assets, such as an institutional account with little cash
movement in either direction, particularly, if a Fund is in net redemption and
the Adviser is frequently forced to sell securities to raise cash for
redemptions. However, managing a fund with positive cash flow may be easier at
times than managing a stable pool of assets. Finally, in recent years,
investment advisers have been sued by institutional clients and have suffered
reputational damage both by the attendant publicity and outcomes other than
complete victories. Accordingly, the legal and reputational risks associated
with institutional accounts are greater than previously thought, although still
not equal to those related to the mutual fund industry.
Notwithstanding the Adviser's view that managing an investment company is not
comparable to managing other institutional accounts because the services
provided are different, it is worth considering information regarding the
advisory
(5) These gross expense ratios are calculated from the beginning of the Funds'
current fiscal year through May 31, 2005.
_______________________________________________________________________________
184 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
fees charged to institutional accounts with substantially similar investment
styles as the Funds. However, the Adviser represented that it does not manage
any separate managed account that has similar investment guidelines as the
Funds. The Adviser does manage separately managed accounts that invest
principally in municipal securities but those mandates have a substantially
lower risk profile (credit and interest rate risk) than the Funds.
The Adviser manages the Sanford C. Bernstein Fund, Inc., an open-end investment
company. The Adviser charges the following fees to the Portfolios that invest
in municipal securities like the Funds, although they invest in securities of
different maturities and qualities:
Fund Advisory Fee
- ------------------------------------------------------------------------------------------------
California Municipal Portfolio 0.50% of the first $1 billion; 0.45%
Diversified Municipal Portfolio in excess of $1 billion up to but not
New York Municipal Portfolio exceeding $3 billion; 0.40% in excess
of $3 billion
Short Duration California Municipal Portfolio 0.50% of the first $250 million; 0.45%
Short Duration Diversified Municipal Portfolio in excess of $250 million up to but not
Short Duration New York Municipal Portfolio exceeding $750 million; 0.40% in
excess of $750 million
The Adviser also manages and sponsors retail mutual funds which are organized
in jurisdictions outside the United States, generally Luxembourg, and sold to
non-United States resident investors. The Adviser charges the following fees
for an offshore mutual fund that invests in fixed income securities:
Asset Class Fee(6)
-------------- ---------
Fixed Income 0.65%
The Adviser represented that it does not sub-advise any registered investment
companies of other fund families with a similar investment style as the Fund.
II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUNDS COMPANIES FOR LIKE SERVICES.
Lipper, Inc., an analytical service that is not affiliated with the Adviser,
compared the fees charged to the Funds with fees charged to other investment
companies for similar services by other investment advisers. Lipper's analysis
included the Funds' ranking with respect to the proposed management fees
relative to the Lipper group median at the approximate current asset levels of
the Funds. (7)
(6) The fee charged to the fund includes a 0.10% fee for administrative
services provided by the Adviser or its affiliates.
(7) It should be noted that "effective management fee" is calculated by Lipper
using each Fund's contractual management fee rate at a hypothetical asset
level. The hypothetical asset level is based on the combined net assets of all
classes of each Fund, rounded up to the next $25 million. Lipper's total
expense ratio information is based on the most recent annual report except as
otherwise noted. A ranking of "1" means that the AllianceBernstein Fund has the
lowest effective fee rate in the Lipper peer group.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 185
Effective Lipper
Fund Management Fee (8) Group Median Rank
- -------------------------------------------------------------------------------
Arizona Portfolio (9) 0.450 0.500 2/8
Florida Portfolio (9) 0.450 0.550 1/9
Massachusetts Portfolio (9) 0.450 0.505 2/12
Michigan Portfolio (9) 0.450 0.530 1/8
Minnesota Portfolio (9) 0.450 0.550 1/9
New Jersey Portfolio 0.450 0.533 1/10
Ohio Portfolio (9) 0.450 0.510 1/9
Pennsylvania Portfolio (9) 0.450 0.500 2/11
Virginia Portfolio (9) 0.450 0.496 3/7
Lipper also analyzed the expense ratio of the Funds in comparison to its Lipper
Expense Group (10) and Lipper Expense Universe (11). Lipper describes a Lipper
Expense Group as a representative sample of comparable funds, consisting of all
funds in the investment classification/objective with a similar load type as
the subject Fund. The Lipper Expense Universe is a broader collection of. The
results of that analysis are set forth below:
Lipper Lipper Lipper Lipper
Expense Universe Universe Group Group
Fund Ratio(12) Median Rank Median Rank
- -------------------------------------------------------------------------------------------------------
Arizona Portfolio (13) 0.780 0.780 6/11 0.780 5/9
Florida Portfolio (13) 0.780 0.878 4/17 0.853 2/10
Massachusetts Portfolio (13) 0.820 0.900 3/17 0.887 3/13
Michigan Portfolio (13) 1.010 0.874 11/12 0.876 9/9
Minnesota Portfolio (13) 0.900 0.883 12/18 0.891 7/10
New Jersey Portfolio 0.870 0.918 6/18 0.900 3/10
Ohio Portfolio (13) 0.850 0.861 6/14 0.871 3/10
Pennsylvania Portfolio (13) 0.945 0.900 13/21 0.921 8/12
Virginia Portfolio (13) 0.720 0.863 3/9 0.882 2/8
(8) It should be noted that the "effective management fee" rate for the Funds
does not reflect the payments by the Funds to the Adviser for certain clerical,
legal, accounting, administrative and other services. The dollar amount and
basis point impact of such payments on the Funds is discussed in Section I.
(9) The number of funds used in Lipper's group ranking for management fees is
one less than the number of funds used in Lipper's group ranking for total
expenses. According to Lipper, the excluded fund's contractual management fee
cannot be computed because of its breakpoint gross income component.
(10) Lipper uses the following criteria in screening funds to be included in
each Fund's Expense Group: fund type, investment classification/objective, load
type and similar 12b-1/non-12b-1 service fees, asset (size) comparability, and
expense components and attributes. An Expense Group will typically consist of
seven to twenty funds.
(11) Except for asset (size) comparability and load type, Lipper uses the same
criteria for selecting an Expense Group when selecting an Expense Universe.
Unlike an Expense Group, an Expense Universe allows for the same adviser to be
represented by more than just one fund.
(12) Most recent fiscal year end Class A share expense ratios.
(13) See footnote 9 on page 8.
_______________________________________________________________________________
186 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Based on this analysis, the Funds have a more favorable ranking on a management
fee basis than they do on a total expense ratio basis. This has resulted in a
variety of efforts by the Adviser to lower non-management expenses.
III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO
THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.
The profitability information for the Funds prepared by the Adviser for the
Board of Trustees was reviewed by the Senior Officer. An independent consultant
is working with the Adviser's personnel on a new system to produce
profitability information at the Fund level which will reflect the Adviser's
management reporting approach. It is possible that future Fund profitability
information may differ from previously reviewed information due to changes in
methodologies and allocations. See Section IV for additional discussion.
IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH
SERVICES.
The Adviser's profitability from providing investment advisory services to the
Funds decreased during calendar 2004 relative to 2003 primarily as a result of
the reduction in the advisory fee schedule implemented early in 2004.
In addition to the Adviser's direct profits from managing the Funds, certain of
the Adviser's affiliates have business relationships with the Funds and may
earn a profit from providing other services to the Funds. The courts have
referred to this type of business opportunity as "fall-out benefits" to the
Adviser and and indicated that they should be factored into the evaluation of
the total relationship between the Funds and the Adviser. Neither case law nor
common business practice precludes the Adviser's affiliates from earning a
reasonable profit on this type of relationship. These affiliates provide
transfer agent and distribution services to the Funds and receive transfer
agent fees, Rule 12b-1 payments, front-end sales loads and contingent deferred
sales charges ("CDSC"). Additional information regarding distribution related
fees can be found in the prospectus of the Funds.
The Adviser's affiliate, AllianceBernstein Investment Research and Management,
Inc. ("ABIRM"), is the Funds' principal underwriter. ABIRM and the Adviser have
disclosed in the Funds prospectus that they may make payments (15) from their
own resources, in addition to resources derived from sales loads and Rule 12b-1
fees, to firms that sell shares of the Funds. In 2004, ABIRM paid approximately
0.04% of the average monthly assets of the AllianceBernstein Mutual Funds for
distribution services and educational support. For 2005, it is anticipated,
ABIRM will pay approximately 0.04% of the average monthly assets of each of the
Funds for such purposes.
(15) The total amount paid to the financial intermediary in connection with
the sale of shares will generally not exceed the sum of (a) 0.25% of the
current year's Fund sales by that firm and (b) 0.10% of the average daily net
assets attributable to that firm over the year.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 187
After payments to third party intermediaries, ABIRM retained the following
amount in Class A front-end load sales charge from sales of the Funds' shares
in the Funds' most recent fiscal year.
Fund Amount Received
- -----------------------------------------------------------------
Arizona Portfolio $27,736
Florida Portfolio $17,832
Massachusetts Portfolio $ 5,041
Michigan Portfolio $10,461
Minnesota Portfolio $ 9,996
New Jersey Portfolio $ 5,041
Ohio Portfolio $19,651
Pennsylvania Portfolio $12,348
Virginia Portfolio $12,243
ABIRM received the amounts set forth below in Rule 12b-1 fees for the Funds
during the Funds most recent fiscal year. A significant percentage of such
amounts were paid out to third party intermediaries by ABIRM.
Fund 12b-1 Fee Received CDSC Received
- ----------------------------------------------------------------------
Arizona Portfolio $1,350,483 $114,629
Florida Portfolio $1,659,761 $114,629
Massachusetts Portfolio $1,213,157 $ 94,638
Michigan Portfolio $1,159,656 $128,394
Minnesota Portfolio $ 588,525 $ 37,438
New Jersey Portfolio $1,616,775 $171,462
Ohio Portfolio $1,529,765 $117,011
Pennsylvania Portfolio $1,261,072 $ 64,097
Virginia Portfolio $1,248,745 $ 79,965
Fees and reimbursements for out of pocket expenses charged by Alliance Global
Investor Services, Inc. ("AGIS"), the affiliated transfer agent, are based on
the level of the network account and the class of share held by the account.
AGIS also receives a fee per shareholder sub-account for each account
maintained by an intermediary on an omnibus basis. AGIS' after-tax
profitability decreased in 2004 in comparison to 2003.
AGIS received the following fees from the Funds in the most recent fiscal year:
Fund AGIS Fee
- -----------------------------------------------------------------
Arizona Portfolio $41,282
Florida Portfolio $43,166
Massachusetts Portfolio $40,520
Michigan Portfolio $54,575
Minnesota Portfolio $38,092
New Jersey Portfolio $73,960
Ohio Portfolio $58,200
Pennsylvania Portfolio $64,526
Virginia Portfolio $45,118
_______________________________________________________________________________
188 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
V. POSSIBLE ECONOMIES OF SCALE
The Adviser has indicated that the breakpoints in the fee schedule in the
Investment Advisory Agreement reflect a sharing of economies of scale to the
extent the breakpoints are reached. Based on some of the professional
literature that has considered economies of scale in the mutual fund industry
it is thought that to the extent economies of scale exist, they may more often
exist across a fund family as opposed to a specific fund. This is because the
costs incurred by the Adviser, such as investment research or technology for
trading or compliance systems can be spread across a greater asset base as the
fund family increases in size. It is also possible that as the level of
services required to operate a successful investment company has increased over
time, and advisory firms have made such investments in their business to
provide improved services, there may be a sharing of economies of scale without
a reduction in advisory fees.
An independent consultant made a presentation to the Board of Trustees and the
Senior Officer regarding possible economies of scale or scope in the mutual
fund industry. Based on the presentation, it was evident that fund management
companies benefit from economies of scale. However, due to lack of cost data,
researchers had to infer facts about the costs from the behavior of fund
expenses; there was a lack of consensus among researchers as to whether
economies of scale were being passed on to the shareholders. It is contemplated
that additional work will be performed to determine if the benefits of
economies of scale or scope are being passed to shareholders by the Adviser. In
the meantime, it is clear that to the extent the Funds' assets exceed the
initial breakpoint its shareholders benefit from a lower fee rate.
VI. NATURE AND QUALITY OF THE ADVISER'S SERVICES INCLUDING THE PERFORMANCE OF
THE FUNDS.
With assets under management of $516 billion as of June 30, 2005, the Adviser
has the investment experience to manage and provide non-investment services
(described in Section II) to the Funds.
The information prepared by Lipper showed the 1, 3, 5 and 10 year performance
ranking of the Funds (16) relative to its Lipper group and universe for the
periods ended May 31, 2005:
Arizona Portfolio Group Universe
1 year 1/9 2/11
3 year 1/9 2/11
5 year 2/9 2/11
10 year 1/8 1/9
Florida Portfolio Group Universe
1 year 2/10 3/17
3 year 2/10 2/17
5 year 3/10 3/17
10 year 1/10 1/17
(16) The performance rankings are for the Class A shares of the Funds.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 189
Massachuesetts Portfolio Group Universe
1 year 1/13 1/17
3 year 9/13 9/17
5 year 8/13 9/16
10 year 1/13 1/16
Michigan Portfolio Group Universe
1 year 1/9 1/13
3 year 2/9 2/13
5 year 1/9 2/13
10 year 1/9 1/13
Minnesota Portfolio Group Universe
1 year 1/10 3/18
3 year 3/10 5/18
5 year 3/9 7/17
10 year 1/9 1/16
New Jersey Portfolio Group Universe
1 year 3/10 5/18
3 year 7/10 11/18
5 year 8/10 15/17
10 year 3/9 6/16
Ohio Portfolio Group Universe
1 year 3/10 3/14
3 year 3/10 5/14
5 year 3/10 4/13
10 year 1/10 1/13
Pennsylvania Portfolio Group Universe
1 year 6/12 7/21
3 year 7/12 8/21
5 year 5/12 5/21
10 year 2/12 2/20
Virginia Portfolio Group Universe
1 year 3/8 4/9
3 year 2/8 2/9
5 year 1/8 1/9
10 year 1/8 1/9
Set forth below are the 1, 3, 5, 10 year and since inception performance
returns of the Funds (in bold) (17) versus its benchmarks (18). It should be
noted that each Fund has the Lehman Brothers Municipal Bond Index as its
benchmark. The Lehman Brothers Municipal Bond Index is a rules-based,
market-value-weighted index engineered for the long-term tax-exempt bond
market. To be included, bonds must be investment grade and be at least one year
from maturity. The index has four main sectors: general obligation bonds,
revenue bonds, insured
(17) The Funds' performance returns are for the Class A shares of the Funds.
(18) The Adviser provided Fund and benchmark performance return information
for periods through May 31, 2005 in order to maintain consistency with Lipper's
performance rankings in the analysis.
_______________________________________________________________________________
190 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
bonds and prerefunded bonds. The index represents a national municipal bond
index as opposed to a specific state index.
Periods Ending May 31, 2005
Annualized Performance
- -------------------------------------------------------------------------------------------------
1 3 5 10 Since
Fund Year Year Year Year Inception
- -------------------------------------------------------------------------------------------------
Arizona Portfolio 9.70 6.22 7.12 6.33 6.77
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.59
Florida Portfolio 8.69 6.33 7.34 6.25 5.87
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
Massachusetts Portfolio 9.27 5.63 6.82 6.32 6.83
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.54
Michigan Portfolio 9.30 5.96 7.41 6.62 6.71
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.10
Minnesota Portfolio 8.58 5.73 6.86 5.98 5.61
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
New Jersey Portfolio 9.28 4.84 6.05 5.53 5.27
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
Ohio Portfolio 8.80 5.57 6.75 5.94 5.60
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
Pennsylvania Portfolio 8.04 5.83 7.24 6.21 5.96
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
Virginia Portfolio 8.39 6.27 7.00 6.54 6.79
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.51
CONCLUSION:
Based on the factors discussed above the Senior Officer's conclusion is that
the proposed fees for the Funds are reasonable and within the range of what
would have been negotiated at arms-length in light of all the surrounding
circumstances. This conclusion in respect of the Funds is based on an
evaluation of all of these factors and no single factor was dispositive.
Dated: October 12, 2005
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 191
NOTES
_______________________________________________________________________________
192 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
MUNIIIAR0905
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer and principal accounting
officer. A copy of the registrant's code of ethics is filed herewith as
Exhibit 12(a)(1).
(b) During the period covered by this report, no material amendments were made
to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers
to the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial
experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) - (c) The following table sets forth the aggregate fees billed by the
independent registered public accounting firm Ernst & Young LLP, for the Fund's
last two fiscal years for professional services rendered for: (i) the audit of
the Fund's annual financial statements included in the Fund's annual report to
stockholders; (ii) assurance and related services that are reasonably related
to the performance of the audit of the Fund's financial statements and are not
reported under (i), which include advice and education related to accounting
and auditing issues, quarterly press release review (for those Funds that issue
press releases), and preferred stock maintenance testing (for those Funds that
issue preferred stock); and (iii) tax compliance, tax advice and tax return
preparation.
Audit Audit-Related Tax
Fees Fees Fees
--------- ------------- --------
Arizona Portfolio 2004 $ 21,500 $ 2,153 $ 14,175
2005 22,500 3,084 14,758
Florida Portfolio 2004 21,500 2,153 14,175
2005 22,500 3,084 15,689
Massachusetts Portfolio 2004 21,500 2,153 14,175
2005 22,500 3,084 12,031
Michigan Portfolio 2004 21,500 2,153 14,175
2005 22,500 3,084 12,116
Minnesota Portfolio 2004 21,500 2,153 14,175
2005 22,500 3,084 10,264
New Jersey Portfolio 2004 21,500 2,153 14,175
2005 22,500 3,084 14,054
Ohio Portfolio 2004 21,500 2,153 14,175
2005 22,500 3,084 14,620
Pennsylvania Portfolio 2004 21,500 2,153 14,175
2005 22,500 3,084 13,022
Virginia Portfolio 2004 21,500 2,153 14,175
2005 22,500 3,084 13,315
(d) Not applicable.
(e) (1) Beginning with audit and non-audit service contracts entered into on
or after May 6, 2003, the Fund's Audit Committee policies and procedures
require the pre-approval of all audit and non-audit services provided to the
Fund by the Fund's independent auditors. The Fund's Audit Committee policies
and procedures also require pre-approval of all audit and non-audit services
provided to the Adviser and Service Affiliates to the extent that these
services are directly related to the operations or financial reporting of the
Fund.
(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in
the table under Item 4 (a) - (c) are for services pre-approved by the Fund's
Audit Committee.
(f) Not applicable.
(g) The following table sets forth the aggregate non-audit services provided
to the Fund, the Fund's Adviser and entities that control, are controlled by or
under common control with the Adviser that provide ongoing services to the
Fund, which include conducting an annual internal control report pursuant to
Statement on Auditing Standards No. 70 ("Service Affiliates"):
Total Amount of
Foregoing Column Pre-
approved by the Audit
All Fees for Committee
Non-Audit Services (Portion Comprised of
Provided to the Audit Related Fees)
Portfolio, the Adviser (Portion Comprised of
and Service Affiliates Tax Fees)
- -------------------------------------------------------------------------------------------------------------
Arizona Portfolio 2004 $ 1,218,060 $ [ 266,328 ]
( 252,153 )
( 14,175 )
2005 892,738 [ 185,545 ]
( 170,787 )
( 14,758 )
Florida Portfolio 2004 1,218,060 [ 266,328 ]
( 252,153 )
( 14,175 )
2005 893,669 [ 186,476 ]
( 170,787 )
( 15,689 )
Massachusetts Portfolio 2004 1,218,060 [ 266,328 ]
( 252,153 )
( 14,175 )
2005 890,011 [ 182,818 ]
( 170,787 )
( 12,031 )
Michigan Portfolio 2004 1,218,060 [ 266,328 ]
( 252,153 )
( 14,175 )
2005 890,096 [ 182,903 ]
( 170,787 )
( 12,116 )
Minnesota Portfolio 2004 1,218,060 [ 266,328 ]
( 252,153 )
( 14,175 )
2005 888,244 [ 181,051 ]
( 170,787 )
( 10,264 )
New Jersey Portfolio 2004 1,218,060 [ 266,328 ]
( 252,153 )
( 14,175 )
2005 892,034 [ 184,841 ]
( 170,787 )
( 14,054 )
Ohio Portfolio 2004 1,218,060 [ 266,328 ]
( 252,153 )
( 14,175 )
2005 892,600 [ 185,407 ]
( 170,787 )
( 14,620 )
Pennsylvania Portfolio 2004 1,218,060 [ 266,328 ]
( 252,153 )
( 14,175 )
2005 891,002 [ 183,809 ]
( 170,787 )
( 13,022 )
Virginia Portfolio 2004 1,218,060 [ 266,328 ]
( 252,153 )
( 14,175 )
2005 891,295 [ 184,102 ]
( 170,787 )
( 13,315 )
(h) The Audit Committee of the Fund has considered whether the provision of
any non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent auditor to the Adviser and Service Affiliates is compatible
with maintaining the auditor's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as
amended) are effective at the reasonable assurance level based on their
evaluation of these controls and procedures as of a date within 90 days of the
filing date of this document.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------- ----------------------
12 (a) (1) Code of Ethics that is subject to the disclosure of Item 2
hereof
12 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): AllianceBernstein Municipal Income Fund II
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: November 29, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: November 29, 2005
By: /s/ Mark D. Gersten
-------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: November 29, 2005